Inertia in Services: Causes and consequences for switching

Research output: Contribution to journalArticle

4 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 pages18
JournalJournal of Services Marketing
Volume31
Issue number6
DOIs
Publication statusPublished - 2017

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

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 andswitching costs) and their relationship to customer satisfaction, service providers’ switching intentions and actual switching behavior. Customerinertia 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 researchof 1055 adult (i.e. 118 years old) subscribers to cell phone services. Partial least squares (PLS) path modeling was used to simultaneously estimateboth 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 negativeeffect on the intention to change service providers but had no measurable effect on the actual behavior of changing service providers, other thanindirectly, by influencing the perception of difficulty in switching some 11 months later. Further results from an analysis of indirect pathways of theantecedents to inertia show that switching costs are the only variable which indirectly reduce intentions to change service providers. The results alsoshow that the effect of satisfaction on switching service providers is partially moderated by inertia. Importantly, these relationships are reasonablyrobust 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 andmoderating effects on service provider switching intentions, though not necessarily the behavior of changing service providers. However, supportwas 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, assatisfaction 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 toservice provider switching and to empirically evaluate a variety of antecedent factors that potentially affect switching intentions. Importantly, thelong 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 = "David Gray and Steven D'Alessandro and Lester Johnson and Leanne Carter",
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language = "English",
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Inertia in Services: Causes and consequences for switching. / Gray, David; D'Alessandro, Steven; Johnson, Lester; 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: Causes and consequences for switching

AU - Gray, David

AU - D'Alessandro, Steven

AU - Johnson, Lester

AU - Carter, Leanne

PY - 2017

Y1 - 2017

N2 - Purpose – This paper aims to examine the antecedents of customer inertia (i.e. knowledge, confusion, perceptions of competitor similarity andswitching costs) and their relationship to customer satisfaction, service providers’ switching intentions and actual switching behavior. Customerinertia 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 researchof 1055 adult (i.e. 118 years old) subscribers to cell phone services. Partial least squares (PLS) path modeling was used to simultaneously estimateboth 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 negativeeffect on the intention to change service providers but had no measurable effect on the actual behavior of changing service providers, other thanindirectly, by influencing the perception of difficulty in switching some 11 months later. Further results from an analysis of indirect pathways of theantecedents to inertia show that switching costs are the only variable which indirectly reduce intentions to change service providers. The results alsoshow that the effect of satisfaction on switching service providers is partially moderated by inertia. Importantly, these relationships are reasonablyrobust 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 andmoderating effects on service provider switching intentions, though not necessarily the behavior of changing service providers. However, supportwas 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, assatisfaction 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 toservice provider switching and to empirically evaluate a variety of antecedent factors that potentially affect switching intentions. Importantly, thelong 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 andswitching costs) and their relationship to customer satisfaction, service providers’ switching intentions and actual switching behavior. Customerinertia 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 researchof 1055 adult (i.e. 118 years old) subscribers to cell phone services. Partial least squares (PLS) path modeling was used to simultaneously estimateboth 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 negativeeffect on the intention to change service providers but had no measurable effect on the actual behavior of changing service providers, other thanindirectly, by influencing the perception of difficulty in switching some 11 months later. Further results from an analysis of indirect pathways of theantecedents to inertia show that switching costs are the only variable which indirectly reduce intentions to change service providers. The results alsoshow that the effect of satisfaction on switching service providers is partially moderated by inertia. Importantly, these relationships are reasonablyrobust 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 andmoderating effects on service provider switching intentions, though not necessarily the behavior of changing service providers. However, supportwas 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, assatisfaction 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 toservice provider switching and to empirically evaluate a variety of antecedent factors that potentially affect switching intentions. Importantly, thelong lasting latent effect of inertia in indirectly influencing service switching behavior was found to persist some 11 months later.

KW - Switching costs, Cell phones, Customer inertia, Service provider switching

U2 - 10.1108/JSM-12-2014-0408

DO - 10.1108/JSM-12-2014-0408

M3 - Article

VL - 31

SP - 485

EP - 498

JO - Journal of Services Marketing

JF - Journal of Services Marketing

SN - 0887-6045

IS - 6

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