The management of customer switching costs has been hampered by the lack of a comprehensive typology for conceptualizing, categorizing, and measuring consumers’ perceptions of these costs. This research develops a switching cost typology that identifies three types of switching costs: (1) procedural switching costs, primarily involving the loss of time and effort; (2) financial switching costs, involving the loss of financially quantifiable resources; and (3) relational switching costs, involving psychological or emotional discomfort due to the loss of identity and the breaking of bonds. The research then examines the antecedents and consequences of switching costs. The results suggest that consumers’ perceptions of product complexity and provider heterogeneity, their breadth of product use, and their alternative provider and switching experience drive the switching costs they perceive. Furthermore, all three switching cost types significantly influence consumers’ intentions to stay with their current service provider, explaining more variance than does satisfaction.
Get full access to this article
View all access options for this article.
References
1.
Aaker, David A. 1992. “The Value of Brand Equity.” Journal of Business Strategy13 (July/August): 27-32.
2.
Alba, Joseph W. and J. Wesley Hutchinson. 1987. “Dimensions of Consumer Expertise.” Journal of Consumer Research13 (March): 411-454.
3.
Anderson, Eugene and Mary W. Sullivan. 1993. “The Antecedents and Consequences of Customer Satisfaction for Firms.” Marketing Science12 (spring): 125-143.
4.
Anderson, James C. and David W. Gerbing. 1988. “Structural Equation Modeling in Practice: A Review and Recommended Two-Step Approach.” Psychological Bulletin103 (3): 411-423.
5.
Arbuckle, James L. and Werner Wothke. 1999. Amos 4.0 User’s Guide. Chicago: Smallwaters Corp.
6.
Bansal, Havir S. and Shirley F. Taylor. 1999. “The Service Provider Switching Model (SPSM).” Journal of Service Research2 (2): 200-218.
7.
Beggs, Alan and Paul Klemperer. 1992. “Multi-Period Competition With Switching Costs.” Econometrica60 (3): 651-666.
8.
Bettman, James R. 1973. “Perceived Risk and Its Components: A Model and Empirical Test.” Journal of Marketing Research10 (May): 184-190.
9.
Bhardawaj, Sunar G., P. Rajan Varadarajan, and John Fahy. 1993. “Sustainable Competitive Advantage in Service Industries: A Conceptual Model and Research Propositions.” Journal of Marketing57 (October): 83-99.
10.
Bhattacharya, C.B., Hayagreeva Rao, and Mary Ann Glynn. 1995. “Understanding the Bond of Identification: An Investigation of Its Correlates Among Art Museum Members.” Journal of Marketing59 (October): 46-57.
11.
Blattberg, Robert C. and John Deighton. 1996. “Managing Marketing by the Customer Equity Test.” Harvard Business Review74 (July/August): 136-144.
12.
Bolton, Ruth N. and James H. Drew. 1991. “A Longitudinal Analysis of the Impact of Service Changes on Customer Attitudes.” Journal of Marketing55 (1): 1-9.
13.
Cannon, Joseph P. and Christian Homburg. 2001. “Buyer-Seller Relationships and Customer Firm Costs.” Journal of Marketing65 (January): 29-43.
14.
Churchill, Gilbert A., Jr. 1979. “A Paradigm for Developing Better Measures of Marketing Constructs.” Journal of Marketing Research16 (February): 64-73.
15.
Crosby, Lawrence A., Kenneth R. Evans, and Deborah Cowles. 1990. “Relationship Quality in Services Selling: An Interpersonal Influence Perspective.” Journal of Marketing54 (July): 68-81.
16.
Dwyer, F. Robert, Paul H. Schurr, and Sejo Oh. 1987. “Developing Buyer-Seller Relationships.” Journal of Marketing51 (April): 11-27.
17.
Eliashberg, Jehoshua and Thomas S. Robertson. 1988. “New Product Preannouncing Behavior: A Market Signaling Study.” Journal of Marketing Research25 (August): 282-292.
18.
Farrell, Joseph and Carl Shapiro. 1988. “Dynamic Competition With Switching Costs.” RAND Journal of Economics19 (spring): 123-137.
19.
Fornell, Claes and David F. Larcker. 1981. “Evaluating Structural Equation Models With Unobservable Variables and Measurement Error.” Journal of Marketing Research18 (February): 39-50.
20.
Fornell, Claes. 1992. “A National Customer Satisfaction Barometer: The Swedish Experience.” Journal of Marketing56 (January): 6-21.
21.
Fournier, Susan and David Glen Mick. 1999. “Rediscovering Satisfaction.” Journal of Marketing63 (October): 5-23.
22.
Gatignon, Hubert and Thomas S. Robertson. 1992. The Handbook of Consumer Behavior. Eds. Thomas S. Robertson and Harold H. Kassarjian. Englewood Cliffs, NJ: Prentice Hall.
23.
Gerbing, David W. and James C. Anderson. 1988. “An Updated Paradigm for Scale Development Incorporating Unidimensionality and Its Assessment.” Journal of Marketing Research25 (May): 186-192.
24.
Guiltinan, Joseph P. 1989. “A Classification of Switching Costs With Implications for Relationship Marketing.” In 1989 AMA Winter Educators’ Conference: Marketing Theory and Practice. Eds. Terry L. Childers, Richard P. Bagozzi, and J. Paul Peter. Chicago: American Marketing Association, 216-220.
25.
Heide, Jan B. and Allen M. Weiss. 1995. “Vendor Consideration and Switching Behavior for Buyers in High-Technology Markets.” Journal of Marketing59 (July): 30-43.
26.
Holak, Susan L. and Donald R. Lehmann. 1990. “Purchase Intentions and the Dimensions of Innovation: An Exploratory Model.” Journal of Product Innovation Management7: 59-73.
27.
Jackson, Barbara B. 1985. Winning and Keeping Industrial Customers. Lexington, MA: Lexington Books.
28.
Jones, Michael A., David L. Mothersbaugh, and Sharon E. Beatty. 2000. “Switching Barriers and Repurchase Intentions in Services.” Journal of Retailing76 (2): 259-274.
29.
Jones, Thomas O. and W. Earl Sasser Jr. (1995). “Why Satisfied Customers Defect.” Harvard Business Review73 (1): 88-99.
30.
Karakaya, Fahri and Michael J. Stahl. 1989. “Barriers to Entry and Market Decisions in Consumer and Industrial Goods Markets.” Journal of Marketing53 (April): 80-91.
31.
Kerin, Roger A., P. Rajan Varadarajan, and Robert A. Peterson. 1992. “First-Mover Advantage: A Synthesis, Conceptual Framework, and Research Propositions.” Journal of Marketing56 (October): 33-52.
32.
Klemperer, Paul. 1987. “Markets With Consumer Switching Costs.” The Quarterly Journal of Economics102 (May): 375-394.
33.
—. 1995. “Competition When Consumers Have Switching Costs: An Overview With Applications to Industrial Organization, Macroeconomics, and International Trade.” Review of Economic Studies62: 515-539.
34.
Kumar, Nirmalya, Louis W. Stern, and Ravi S. Achrol. 1992. “Assessing Reseller Performance From the Perspective of the Supplier.” Journal of Marketing Research24 (May): 238-253.
35.
Marketing Science Institute. 2002. Research Priorities 2002-2004. Cambridge, MA: Marketing Science Institute.
36.
McCracken, Grant. 1986. “Culture and Consumption: A Theoretical Account of the Structure and Movement of the Cultural Meaning of Consumer Goods.” Journal of Consumer Research13 (June): 71-84.
37.
Mittal, Vikas and Wagner A. Kamakura. 2001. “Satisfaction, Repurchase Intent, and Repurchase Behavior: Investigating the Moderating Effect of Consumer Characteristics.” Journal of Marketing Research38 (1), 131-142.
38.
Morgan, Robert M. and Shelby D. Hunt. 1994. “The Commitment-Trust Theory of Relationship Marketing.” Journal of Marketing58 (July): 20-38.
39.
Nilssen, Tore. 1992. “Two Kind of Consumer Switching Costs.” RAND Journal of Economics23 (winter): 579-589.
40.
Oliva, Terence A., Richard L. Oliver, and Ian C. MacMillan. 1992. “A Catastrophe Model for Developing Service Satisfaction Strategies.” Journal of Marketing56 (3): 83-95.
41.
Oliver, Richard. 1997. Satisfaction: A Behavioral Perspective on the Consumer. Boston: McGraw-Hill.
Park, C. Whan, David L. Mothersbaugh, and Lawrence Feick. 1994. “Consumer Knowledge Assessment.” Journal of Consumer Research21 (1): 71-82.
44.
Ping, Robert A., Jr. 1993. “The Effects of Satisfaction and Structural Constraints on Retailer Exiting, Voice, Loyalty, Opportunism, and Neglect.” Journal of Retailing69 (fall): 320-352.
45.
—. 1997. “Voice in Business to Business Relationships: Cost-of-Exit and Demographic Antecedents.” Journal of Retailing73 (2): 261-281.
46.
Porter, Michael E. 1980. Competitive Strategy. New York: Free Press.
47.
Ram, S. and Hyung-Shik Jung. 1990. “The Conceptualization and Measurement of Product Usage.” Journal of the Academy of Marketing Science18 (winter): 67-76.
48.
Reichheld, Frederick F. 1996. The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value. Boston, MA: Harvard Business School Press.
49.
Robinson, William T. 1988. “Sources of Market Pioneer Advantages: The Case of Industrial Goods.” Journal of Marketing Research25 (February): 87-94.
50.
Rogers, Everett M. 1995. Diffusion of Innovations. New York: Free Press.
51.
Samuelson, William and Richard Zeckhauser. 1988. “Status Quo Bias in Decision Making.” Journal of Risk and Uncertainty1: 7-59.
52.
Schmalensee, Richard. 1982. “Production Differentiation Advantages of Pioneering Brands.” American Economic Review27: 349-365.
53.
Sheth, Jagdish N. and Atul Parvatiyar. 1995. “Relationship Marketing in Consumer Markets: Antecedents and Consequences.” Journal of the Academy of Marketing Science23 (fall): 255-272.
54.
Shugan, Steven M. 1980. “The Costs of Thinking.” Journal of Consumer Research7 (September): 99-111.
55.
Stremersch, Stefan and Gerard J. Tellis. 2002. “Strategic Bundling of Products and Prices: A New Synthesis for Marketing.” Journal of Marketing66 (January): 55-72.
56.
Szymanski, David M. and David H. Henard. 2001. “Customer Satisfaction: A Meta-Analysis of Empirical Evidence.” Journal of the Academy of Marketing Science29 (1): 16-35.
57.
Venkatesh, R. and Vijay Mahajan. 1993. “A Probabilistic Approach to Pricing a Bundle of Products or Services.” Journal of Marketing Research30 (November): 494-509.
58.
Weiss, Allen M. and Jan B. Heide. 1993. “The Nature of Organizational Search in High Technology Markets.” Journal of Marketing Research30 (May): 220-233.
59.
Wernerfelt, Birger. 1985. “Brand Loyalty and User Skills.” Journal of Economic Behavior and Organizations6: 381-385.
