How switching costs affect subscriber loyalty in the Turkish mobile phone market: An exploratory study

Abstract

a new customer have been found to be up to six times higher than the costs of retaining existing ones'.1 Moreover, it is known that as customer loyalty increases, the sensitivity of the customer to price decreases.2 In this context, the struggle to protect customer base by acquiring loyal customers through developing long-term relationships is important. Especially in telecommunications services, it is frequently noted that once customers have been acquired and connected to a particular operator's network, their long-term relationships with the focal INTRODUCTIONDue to changes in the technology and business environment, markets have now reached the maturity phase, shifting from local or domestic to international competence. Hence, in the more competitive market, firms work with products with a shorter product-life curve. In this environment, acquiring new customers has become difficult. As the cost and difficulty of acquiring new customers increase, protecting the existing customer base becomes important. Indeed, 'the costs of attracting Gö khan Ö zeris Associate Professor at the School of Business Administration, Gebze Institute of Technology, Turkey, and an advisor to the Turkish Telecommunications Board.Abstract Both academics and practitioners approve of the strategic role of customer switching cost on ensuring customer loyalty. However, there is no consensus on either conceptualisation or measuring customer switching costs. In this context, the aims of this study are (1) to develop a model by using different sub-constructs of customer switching costs to prove this model's reliability and validity (discriminant and convergence) and (2) to analyse relationships among customer loyalty, customer satisfaction, trust and switching costs' sub-constructs in the mobile phone market. To this end, the data were obtained from 1,662 'global system for mobiles' (GSM) users by using a questionnaire. The findings, reached from exploratory and confirmatory factor analysis, show that the model of customer switching costs is reliable and valid, and there are statistically significant relationships among variables as expected.

Exploring the Main Factors Affecting Consumer Choice of Mobile Phone Service Provider Contracts

“…Another example that provided by [53] who identified how punishments can be used to make families adapt healthy food purchase. Accordingly, the results in this study demonstrated that "switching cost" affects operator contract choice with high relative importance of 35.6%, as confirmed by other studies such as [31] as well as [33]. However, there were no significant effects for both mobile signal strength as well as sales and maintenance outlets availability on consumer decisions and this was even ranked low for mobile service provider contract choices.…”

“…According to many scholars such as [6] Owing to the difficulty to retain customers, many authors [31]- [36] have studied the effect of switching cost on consumer purchase behaviour, and have confirmed its strong effect on consumer choice. [37] defines switching costs as "one-time costs facing the buyer when switching from one supplier's product to another's" (p. 10).…”

Why Consumers (Do Not) Change Their Mobile Service Providers – a Hungarian Study

“…Previous studies usually considered the consumer satisfaction as a direct antecedent of consumer loyalty (Turel et al, 2006), or studied the consumer trust next to the satisfaction without considering any casual relationship between satisfaction and trust. The connection between the switching costs and consumer loyalty also have been researched previously (Aydin et al, 2005), but the present study examine the effects of switching costs in a more complex framework together with the satisfaction and trust. Switching costs can be elaborated a more rational reason to behave loyal.…”

Churn management in the telecom industry of Pakistan: A comparative study of Ufone and Telenor

“…There is a signifi cant relationship between customer loyalty, customer satisfaction, trust and switching costs in the mobile phone market. 4 In this fi ercely competitive arena, subscribers demand tailored products and better services at lower prices, while service providers focus on customer acquisition as their prime business goal. Customer retention has become the key business issue for telecom companies towards the end of the 1990s.…”