The current study moves beyond satisfaction and proposes that switching barriers are important factors impacting a customer's decision to remain with a service provider. Switching barriers make customer defection difficult or costly and include interpersonal relationships, perceived switching costs, and the attractiveness of alternatives. We propose and find support for a contingency model between core-service satisfaction and switching barriers. The results indicate that the influence of core-service satisfaction on repurchase intentions decreases under conditions of high switching barriers. Although switching barriers had no influence on repurchase intentions when satisfaction was high, switching barriers positively influenced repurchase intentions when satisfaction was low. Implications of the results are discussed.
As competition and the costs of attracting new customers increase, companies are increasingly focusing their strategic efforts on customer retention (Berry, 1983; Fornell, 1992; Fornell and Wernerfelt, 1987). Obviously, a key component in any customer retention program is satisfaction (e.g., Cronin and Taylor, 1992; Oliver and Swan, 1989). However, satisfaction need not be the only strategy (Bendapudi and Berry, 1997; Fornell, 1992). Barriers to customer defection, such as development of strong interpersonal relationships or imposition of switching costs, represent additional retention strategies. Such barriers are important because they may generally foster greater retention and because they may help companies weather short-term fluctuations in service quality that might otherwise result in defection.
Despite their potential importance in the retention process, the role of switching barriers has received relatively little attention in marketing (exceptions include Anderson, 1994; Maute and Forrester, 1993). The empirical and theoretical focus has instead been predominantly on customer satisfaction. Interestingly, although numerous studies support the importance of customer satisfaction in the retention process, the relationship between these variables often evidences considerable variability. As just one example, Anderson and Sullivan (1993) found t-values for the satisfaction-repurchase intention relationship ranging from 1.1 to 13.1. Such variability highlights the possibility that (1) retention may depend on additional factors such as switching barriers, and (2) the relationship between satisfaction and retention may be contingent on switching barriers arising in the context of service provision.
The current study develops and tests a model of customer retention that incorporates such contingencies between customer satisfaction and switching barriers. A contingency approach has been called for by a number of researchers (e.g., Anderson and Fornell, 1994), but has generally not been adopted in studies of customer retention. A core proposition is that the effect of satisfaction on repurchase intentions depends on the magnitude of switching barriers in the service context. Satisfaction should play a lesser role when exit barriers are high and a greater role when exit barriers are low. This proposition, if supported, would (1) augment existing customer-retention models which focus mostly on satisfaction, (2) help to explain variability in the satisfaction-retention relationship evidenced in prior research, and (3) provide guidance to service firms in developing customer-retention programs.
THEORY AND HYPOTHESES
Satisfaction and Repurchase Intentions
Satisfaction is an overall evaluation of performance based on all prior experiences with a firm (Anderson and Fornell, 1994; Bitner and Hubbert, 1994)....