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Switching barriers in consumer markets: an investigation of the financial services industry

Colgate, Mark, Lang, Bodo·2001·Journal of Consumer Marketing
DOI 10.1108/07363760110393001
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Abstract

Much research looks at why customers switch service organizations but there has been less focus on why customers do not switch service organizations, even though they have seriously considered doing so. In light of this, we present an analysis of the literature and develop a list of potential switching barriers. These switching barriers are then empirically tested within two financial services industries. Results from over 400 consumers enable us to ascertain not only the importance of each switching barrier but also to develop a more parsimonious understanding of these barriers, through factor analysis. The results reveal similar patterns in the two industries in respect to switching barriers. The first of the four factors contains reasons related to apathy, the second factor contains negative reasons for customers staying with their current service provider, the third factor relates to relationship variables and the final factor relates to service recovery. Results clearly indicate that the first two factors are far more important than the latter two in terms of why customers stay even when they seriously considered leaving.

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Crossref · 10.1108/07363760110393001

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32 of 32 references verified0 citation errors · 0 not checkable

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  • Financial services customers with higher inertia are likely to purchase a specific service repeatedly.

    “Financial services customers experiencing higher degree of inertia are likely to purchase a specific service repeatedly (Colgate and Lang 2001).”

    From Health insurance policy renewal: an exploration of reputation, performance, and affect to understand customer inertia (2022) · cites this paper as Colgate and Lang 2001

  • The first perspective on customer inertia is associated with lack of attractive alternatives, and the second describes inertia as a function of customers' passivity, inactivity, and non-conspicuousness.

    “The first perspective on customer inertia has been associated with lack of attractive alternatives (Bozzo 2002; Colgate and Lang 2001) and the second described inertia as a function of customers’ passivity, inactivity, and non-conspicuousness (White and Yanamandram 2007).”

    From Health insurance policy renewal: an exploration of reputation, performance, and affect to understand customer inertia (2022) · cites this paper as Colgate and Lang 2001

  • Firms having customers who feel succumbed to other providers are likely to lead to negative word of mouth, less ability to cross-sell, lower acceptance of new products, and other negative outcomes associated with customer defection.

    “firms having customers who feel succumbed to other providers are likely to lead to negative word of mouth, less ability to cross-sell, lower acceptance of new products, and other negative outcomes associated with customer defection (Colgate and Lang 2001, p. 343).”

    From Health insurance policy renewal: an exploration of reputation, performance, and affect to understand customer inertia (2022) · cites this paper as Colgate and Lang 2001

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Authors
Colgate, M., & Lang, B.
Affiliations
University of Auckland (NZ)
ORCID
Venue
Journal of Consumer Marketing
Publisher
Emerald
Published
2001-07-01
Volume
18
Issue
4
Pages
332-347
ISSN
0736-3761 (ISSN-L)
DOI
10.1108/07363760110393001
OpenAlex
W2013663887
Cited by
457
References
32
Citations by year
2026: 9 · 2025: 12 · 2024: 26 · 2023: 15 · 2022: 18 · 2021: 22 · 2020: 11 · 2019: 23 · 2018: 30 · 2017: 32 · 2016: 26 · 2015: 25 · 2014: 32 · 2013: 21 · 2012: 25
FWCI
10.81
Type
journal article
Language
en
Open access
closed
Licence
www.emerald.com/insight/site-policies (tdm)
Locations
Journal of Consumer Marketing (publishedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Organizational Behavior and Human Resource Management › Customer Service Quality and Loyalty
  • Social Sciences › Business, Management and Accounting › Marketing › Customer churn and segmentation
  • Social Sciences › Business, Management and Accounting › Marketing › Consumer Market Behavior and Pricing
Keywords
switching barriers, customer retention, customer switching, financial services, service recovery, customer loyalty, service providers

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