Customer Switching Resistance

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Effects of Switching Barriers on Satisfaction, Repurchase Intentions and Attitudinal Loyalty

Claes-Robert Julander Ragnar Söderberg Professor of Business Administration Center for Consumer Marketing Stockholm School of Economics1

Magnus Söderlund Associate Professor Center for Consumer Marketing Stockholm School of Economics

SSE/EFI Working Paper Series in Business Administration. No. 2003:1. Stockholm: January 2003.

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Claes-Robert Julander Stockholm School of Economics Box 6501 se 113 83 Stockholm Sweden Phone: +468 736 90 13 Fax: +468 33 94 89 Email: claes-robert.Julander@hhs.se

Effects of Switching Barriers on Satisfaction, Repurchase Intentions and Attitudinal Loyalty

ABSTRACT The positive effect of customer satisfaction on repurchase intentions and attitudinal loyalty has been shown in numerous studies. The effect of switching barriers on these variables, however, have been subject to much less attention from researchers. In this study we propose that switching barriers can be seen as either positive or negative, and we examine their effects on customer satisfaction, repurchase intentions and attitudinal loyalty. A LISREL analysis of the empirical data shows that negative switching barriers have negative effects on customer satisfaction and attitudinal loyalty, but a positive effect on repurchase intentions. Positive switching barriers impinge positively on customer satisfaction, repurchase intentions and attitudinal loyalty. Keywords: Switching barriers, loyalty, satisfaction, repurchase intentions

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Introduction Numerous studies show that customer satisfaction is related to repurchase intentions and attitudinal loyalty (Cronin & Taylor, 1992; Fornell, 1992; Anderson & Sullivan, 1990; Boulding, Kalra, Staeling, & Zeithaml, 1993; Taylor & Baker 1994; de Ruyter, Wetzels, & Bloemer, 1996; Zeithamel, Berry, & Parasuraman, 1996; Mägi & Julander 1996). However, customer satisfaction never explains all of the variation in repurchase intentions or attitudinal loyalty, since customers seldom are completely free to choose suppliers. In fact, different types of constraints, together with customer satisfaction, determine customers choice of supplier (Bendapudi & Berry 1997). In this paper such constraints are termed switching barriers. Only a few empirical studies, however, investigate how various types of switching barriers affect satisfaction with suppliers, repurchase intentions, attitudinal loyalty and the relationships between these variables (Jones, Mothersbaugh, & Beatty, 2000). It has been pointed out, starting with Hirschman, that customers remain loyal to a supplier either because they want to or they have to (Hirschman, 1970; Johnson, 1982; Levinger, 1979; Ping, 1993). High switching barriers mean that customers have to stay (or perceive that they have to) with suppliers, irrespective of the satisfaction created in the relationship. Such constrained freedom of choice could, according to reactance theory, create lower satisfaction, repurchase intentions and attitudinal loyalty than a more unconstrained situation (cf. Ringold, 1988). Both from a theoretical and a managerial perspective it is of interest to investigate how switching barriers affect satisfaction, repurchase intentions and attitudinal loyalty. That is to say, the theoretical framework built up around customer satisfaction and loyalty needs to incorporate switching barriers (Bendapudi & Berry 1997), and address several questions that to date have received little attention. How important are they for customer retention, loyalty and repurchase intentions? Do switching barriers interact with satisfaction and in this way enhance loyalty or do they affect purchase intentions and long-term customer loyalty independently of satisfaction? Are switching barriers a unidimensional concept or are there different types of switching

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barriers - with unique effects on customer satisfaction, customer loyalty and repurchase intentions?...
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