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. +18 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.

Switching from cash to mobile payment: what's the hold-up?

“…IN is posited to enhance one's resistance to change regardless of their views on the alternatives (Barnes and Stack, 2016). This is also said to be true in the context of service in general (Gray et al, 2017). Past studies that have established IN as a significant determinant of SI in mobile-related services.…”

Is satisfaction a necessary and sufficient condition to avoid switching? The moderating role of service type

“…Perceived service quality Antón et al (2007), Bansal et al (2005), Chakravarty et al (2004), Colgate and Norris (2001), Coulter and Ligas (2000), Cronin et al (2000), Grace and O'Cass (2001), Gray et al (2017), Jung et al (2017), Lee and Cunningham (2001), Malhotra and Malhotra (2013), McDougall and Levesque (2000), Liang et al (2013), Srivastava and Sharma (2013) Satisfaction Athanassopoulos (2000Athanassopoulos ( , 2001, Bansal et al (2005), Calvo-Porral and Lévy-Mangin…”

Consumer loyalty toward smartphone brands: The determining roles of deliberate inertia and cognitive lock-in

“…Cognitive lock-in may be another powerful factor that fosters consumers' deliberate inertia of using incumbent brand of ICT products, although the literature has revealed several driving forces of inertia, including individual differences [72], consumers' habit [72,82], perceived norms [29], knowledge [28], education, training, and personal innovativeness [24].…”

“…Further, the recent study in health care sector by Heiss et al [39] shows that inattention and switching costs are the major sources of inertia. Similarly, in the smartphone service context, Gray, D'Alessandro, Johnson, and Carter [28] show that consumers' lack of knowledge or awareness of competing offers leads to inertia, and they argue that consumers' inertia can be a result of consumer cognitive lock-in. Indeed, when consumers are cognitively locked-in to the incumbent brand, they lack motivation to search for alternatives and pay little attention to alternative brands and benefits.…”