Why do customers switch? The dynamics of satisfaction versus loyalty

Abstract

One of the most unexamined assumptions marketing firms have made in recent years is that satisfaction alone will guarantee customer loyalty. Our research questions this assumption. We explored the correspondence between customer satisfaction and loyalty, and found as many as half of the “satisfied” customers to be predisposed to switching service suppliers. This satisfaction‐loyalty gap reflects the fact that different components of service quality drive satisfaction versus loyalty. Satisfaction is driven more by “technical quality” (the quality of the work performed) than by “functional quality” (how the service work was delivered); however, once satisfaction is achieved, loyalty is driven more by functional than by technical quality. This is the pattern of influence for a “low contact” (where customers’ direct contact with service providers is absent or marginal) service. For a “high contact” service, the pattern of influence is exactly the reverse. Of significant importance to service managers, the paper explains the dynamics of loyalty versus satisfaction and derives their managerial implications.