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Cited by 78Customer Service Quality and LoyaltyCustomer churn and segmentationConsumer Market Behavior and Pricing

Interactions and consequences of inertia and switching costs

Lee, Richard, Neale, Larry·2012·Journal of Services Marketing
DOI 10.1108/08876041211245281
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Abstract

Purpose: Service research typically relates switching costs to customer loyalty, and portrays them as effective switching deterrents that engender harmful word‐of‐mouth (WOM). Rather than to customer loyalty, this paper aims to relate switching costs to consumer inertia, and show that while switching costs may result in customer retention, they can engender positive and negative WOM. This depends on whether the inertia stems from satisfaction or indifference. Design/methodology/approach: A mall‐intercept survey investigated 518 customers' perceptions of their mobile phone service providers. Structural equation modelling fitted the data to the conceptual model. Findings: Switching costs deterred switching and engendered negative WOM, but only with low‐inertia customers. With high‐inertia customers, retention and WOM behaviours depended on whether the inertia stemmed from satisfaction or indifference. Satisfied customers with high switching costs tended to stay, gave more positive and less negative WOM. With indifferent customers, switching costs were unrelated to retention or WOM behaviours. Research limitations/implications: While they may be perceived negatively, switching costs can engender PWOM. Hence, research should not consider switching costs alone without considering the context that produces them. Practical implications: Service providers should segment their customers into low‐inertia, high‐inertia/satisfied and high‐inertia/indifferent, and target each segment differently. By converting customers into the high‐inertia/satisfied segment, service providers can make the best use of switching costs – not only in the traditional sense as a barrier to defection, but also as a way of generating positive WOM. Originality/value: This study is the first to consider the role of inertia with switching costs, positive WOM, and negative WOM. The findings suggest that past studies portraying switching costs as negative impediments that evoke only negative WOM might be misleading.

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Authors
Lee, R., & Neale, L.
Affiliations
  • University of South Australia (AU)
  • Queensland University of Technology (AU)
ORCID
Venue
Journal of Services Marketing
Publisher
Emerald
Published
2012-07-27
Volume
26
Issue
5
Pages
365-374
ISSN
0887-6045 (ISSN-L)
DOI
10.1108/08876041211245281
OpenAlex
W67102468
Cited by
78
References
41
Citations by year
2026: 4 · 2025: 5 · 2024: 7 · 2023: 8 · 2022: 6 · 2021: 6 · 2020: 5 · 2019: 4 · 2018: 10 · 2017: 7 · 2016: 4 · 2015: 6 · 2014: 5 · 2013: 1
FWCI
7.77
Type
journal article
Language
en
Open access
closed
Licence
www.emerald.com/insight/site-policies (tdm)
Locations
  • Journal of Services Marketing (publishedVersion)
  • QUT Business School
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 costs, consumer inertia, customer loyalty, word of mouth, positive word of mouth, negative word-of-mouth, customer retention, customer satisfaction, mobile operators, customer segmentation, service switching

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