Inertia in Services: Causes and consequences for switching

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

Purpose – This paper aims to examine the antecedents of customer inertia (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs) and their relationship to customer satisfaction, service providers’ switching intentions and actual switching behavior. Customer inertia is said to reduce the incidence of service provider switching; however, little is known about the antecedent drivers of inertia.
Design/methodology/approach – The conceptual model was tested by a longitudinal/discontinuous panel design using an online survey research of 1055 adult (i.e. 118 years old) subscribers to cell phone services. Partial least squares (PLS) path modeling was used to simultaneously estimate both the measurement and structural components of the model to determine the nature of the relationships between the variables.
Findings – Findings of the PLS structural model provide support for the direct relationship between customer inertia and its antecedents (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs). The results show that customer inertia has a moderate negative effect on the intention to change service providers but had no measurable effect on the actual behavior of changing service providers, other than indirectly, by influencing the perception of difficulty in switching some 11 months later. Further results from an analysis of indirect pathways of the antecedents to inertia show that switching costs are the only variable which indirectly reduce intentions to change service providers. The results also show that the effect of satisfaction on switching service providers is partially moderated by inertia. Importantly, these relationships are reasonably robust given past switching behavior and contract status of consumers.
Research limitations/implications – The authors find evidence which explains some of the causes of inertia, and show that it has both direct and moderating effects on service provider switching intentions, though not necessarily the behavior of changing service providers. However, support was found for its indirect role through intent as an influence on switching behavior. Importantly, the authors find that inertia has lingering effects, in
that it influences the perception of switching difficulties and, hence, behavior up to 11 months in the future.
Practical implications – Managerial implications are that service firms can profit from customer inertia through a reduction in churn. However, high levels of customer inertia over the longer term may increase the level of customer vulnerability to competitor offers and marketing activities, as satisfaction with the provider does not in itself explain switching intentions or behavior.
Originality/value – This study is the first study to contribute to an understanding of the antecedent drivers of customer inertia with respect to service provider switching and to empirically evaluate a variety of antecedent factors that potentially affect switching intentions. Importantly, the long lasting latent effect of inertia in indirectly influencing service switching behavior was found to persist some 11 months later.
Original languageEnglish
Article number2
Pages (from-to)485-498
Number of pages15
JournalJournal of Services Marketing
Volume31
Issue number6
DOIs
Publication statusPublished - 2017

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Inertia
Service provider
Switching behavior
Switching costs
Competitors
Partial least squares
Pathway
Cell phone
Survey research
Factors
Online survey
Direct effect
Moderating effect
Design methodology
Conceptual model
Vulnerability
Modeling
Marketing activities
Profit
Structural model

Cite this

@article{125fa56f74284aac8d21a469524cdc63,
title = "Inertia in Services: Causes and consequences for switching",
abstract = "Purpose – This paper aims to examine the antecedents of customer inertia (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs) and their relationship to customer satisfaction, service providers’ switching intentions and actual switching behavior. Customer inertia is said to reduce the incidence of service provider switching; however, little is known about the antecedent drivers of inertia. Design/methodology/approach – The conceptual model was tested by a longitudinal/discontinuous panel design using an online survey research of 1055 adult (i.e. 118 years old) subscribers to cell phone services. Partial least squares (PLS) path modeling was used to simultaneously estimate both the measurement and structural components of the model to determine the nature of the relationships between the variables.Findings – Findings of the PLS structural model provide support for the direct relationship between customer inertia and its antecedents (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs). The results show that customer inertia has a moderate negative effect on the intention to change service providers but had no measurable effect on the actual behavior of changing service providers, other than indirectly, by influencing the perception of difficulty in switching some 11 months later. Further results from an analysis of indirect pathways of the antecedents to inertia show that switching costs are the only variable which indirectly reduce intentions to change service providers. The results also show that the effect of satisfaction on switching service providers is partially moderated by inertia. Importantly, these relationships are reasonably robust given past switching behavior and contract status of consumers.Research limitations/implications – The authors find evidence which explains some of the causes of inertia, and show that it has both direct and moderating effects on service provider switching intentions, though not necessarily the behavior of changing service providers. However, support was found for its indirect role through intent as an influence on switching behavior. Importantly, the authors find that inertia has lingering effects, inthat it influences the perception of switching difficulties and, hence, behavior up to 11 months in the future. Practical implications – Managerial implications are that service firms can profit from customer inertia through a reduction in churn. However, high levels of customer inertia over the longer term may increase the level of customer vulnerability to competitor offers and marketing activities, as satisfaction with the provider does not in itself explain switching intentions or behavior.Originality/value – This study is the first study to contribute to an understanding of the antecedent drivers of customer inertia with respect to service provider switching and to empirically evaluate a variety of antecedent factors that potentially affect switching intentions. Importantly, the long lasting latent effect of inertia in indirectly influencing service switching behavior was found to persist some 11 months later.",
keywords = "Switching costs, Cell phones, Customer inertia, Service provider switching",
author = "Gray, {David M.} and Steven D'Alessandro and Johnson, {Lester W.} and Leanne Carter",
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language = "English",
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}

Inertia in Services : Causes and consequences for switching. / Gray, David M.; D'Alessandro, Steven; Johnson, Lester W.; Carter, Leanne.

In: Journal of Services Marketing, Vol. 31, No. 6, 2, 2017, p. 485-498.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Inertia in Services

T2 - Causes and consequences for switching

AU - Gray, David M.

AU - D'Alessandro, Steven

AU - Johnson, Lester W.

AU - Carter, Leanne

N1 - Includes bibliographical references.

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N2 - Purpose – This paper aims to examine the antecedents of customer inertia (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs) and their relationship to customer satisfaction, service providers’ switching intentions and actual switching behavior. Customer inertia is said to reduce the incidence of service provider switching; however, little is known about the antecedent drivers of inertia. Design/methodology/approach – The conceptual model was tested by a longitudinal/discontinuous panel design using an online survey research of 1055 adult (i.e. 118 years old) subscribers to cell phone services. Partial least squares (PLS) path modeling was used to simultaneously estimate both the measurement and structural components of the model to determine the nature of the relationships between the variables.Findings – Findings of the PLS structural model provide support for the direct relationship between customer inertia and its antecedents (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs). The results show that customer inertia has a moderate negative effect on the intention to change service providers but had no measurable effect on the actual behavior of changing service providers, other than indirectly, by influencing the perception of difficulty in switching some 11 months later. Further results from an analysis of indirect pathways of the antecedents to inertia show that switching costs are the only variable which indirectly reduce intentions to change service providers. The results also show that the effect of satisfaction on switching service providers is partially moderated by inertia. Importantly, these relationships are reasonably robust given past switching behavior and contract status of consumers.Research limitations/implications – The authors find evidence which explains some of the causes of inertia, and show that it has both direct and moderating effects on service provider switching intentions, though not necessarily the behavior of changing service providers. However, support was found for its indirect role through intent as an influence on switching behavior. Importantly, the authors find that inertia has lingering effects, inthat it influences the perception of switching difficulties and, hence, behavior up to 11 months in the future. Practical implications – Managerial implications are that service firms can profit from customer inertia through a reduction in churn. However, high levels of customer inertia over the longer term may increase the level of customer vulnerability to competitor offers and marketing activities, as satisfaction with the provider does not in itself explain switching intentions or behavior.Originality/value – This study is the first study to contribute to an understanding of the antecedent drivers of customer inertia with respect to service provider switching and to empirically evaluate a variety of antecedent factors that potentially affect switching intentions. Importantly, the long lasting latent effect of inertia in indirectly influencing service switching behavior was found to persist some 11 months later.

AB - Purpose – This paper aims to examine the antecedents of customer inertia (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs) and their relationship to customer satisfaction, service providers’ switching intentions and actual switching behavior. Customer inertia is said to reduce the incidence of service provider switching; however, little is known about the antecedent drivers of inertia. Design/methodology/approach – The conceptual model was tested by a longitudinal/discontinuous panel design using an online survey research of 1055 adult (i.e. 118 years old) subscribers to cell phone services. Partial least squares (PLS) path modeling was used to simultaneously estimate both the measurement and structural components of the model to determine the nature of the relationships between the variables.Findings – Findings of the PLS structural model provide support for the direct relationship between customer inertia and its antecedents (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs). The results show that customer inertia has a moderate negative effect on the intention to change service providers but had no measurable effect on the actual behavior of changing service providers, other than indirectly, by influencing the perception of difficulty in switching some 11 months later. Further results from an analysis of indirect pathways of the antecedents to inertia show that switching costs are the only variable which indirectly reduce intentions to change service providers. The results also show that the effect of satisfaction on switching service providers is partially moderated by inertia. Importantly, these relationships are reasonably robust given past switching behavior and contract status of consumers.Research limitations/implications – The authors find evidence which explains some of the causes of inertia, and show that it has both direct and moderating effects on service provider switching intentions, though not necessarily the behavior of changing service providers. However, support was found for its indirect role through intent as an influence on switching behavior. Importantly, the authors find that inertia has lingering effects, inthat it influences the perception of switching difficulties and, hence, behavior up to 11 months in the future. Practical implications – Managerial implications are that service firms can profit from customer inertia through a reduction in churn. However, high levels of customer inertia over the longer term may increase the level of customer vulnerability to competitor offers and marketing activities, as satisfaction with the provider does not in itself explain switching intentions or behavior.Originality/value – This study is the first study to contribute to an understanding of the antecedent drivers of customer inertia with respect to service provider switching and to empirically evaluate a variety of antecedent factors that potentially affect switching intentions. Importantly, the long lasting latent effect of inertia in indirectly influencing service switching behavior was found to persist some 11 months later.

KW - Switching costs

KW - Cell phones

KW - Customer inertia

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JO - Journal of Services Marketing

JF - Journal of Services Marketing

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