Switching barriers used to retain retail banking customers

Abstract

Purpose -The purpose of this paper is to uncover the dimensions that form the construct of switching barriers for retail banking customers in the Chilean banking industry. Design/methodology/approach -The investigation was divided into three stages: Stage 1: literature and existing research review, Stage 2: qualitative focused interviews, and Stage 3: survey including pre-test, pilot survey, and main survey. Findings -The research results uncovered the existence of a five-factor structure measuring switching barriers. Three factors were associated with positive or more reward-based switching barriers (organizational credibility, value congruency, and relational value) and two factors accounted for negative or punitive switching barriers (difficulties of switching and lack of attractive alternatives). The study also showed that Chilean customers perceive banks as using more punitive switching barriers rather than rewarding ones. Originality/value -The study attempts to validate the findings of past research in the case of South America.

Innovation, learning and performance in a resource-rich emerging economy

“…Hence, this research does not support the null hypotheses H1, that innovation has no influence on the performance of firms operating the banking and retail sectors of an emerging economy. This conclusion is supportive of the limited number of studies undertaken on service sector firms in South American emerging economies, namely involvement in innovation assists local firms to respond to increasing competitive pressures generated by new market entrants from abroad (Bianchi 2009;Nepomuceno & Porto 2010;Valenzuela 2010). The regression analyses of business performance in relation to learning style and involvement in organisational learning among Peruvian consumer banking and retail operations were both statistically significant at p < 0.05.…”

“…Within the retail sector, established supermarket chains such as Wong and Supermercados Peruanos have been forced to defend their market position following the arrival of food retailers such as Tottus and Makro. As a consequence, and similar to other South American countries, domestic service providers in Peru are needed to place greater emphasis on the exploitation of learning and innovation to expand their service portfolios, http://www.sajbm.org Open Access upgrade internal processes and enhance service quality (Nepomuceno & Porto 2010;Valenzuela 2010).…”

Rewarding and Punitive Switching Barriers in a Continuous Purchasing Setting: The Impact of Relationship Age

“…First, different dimensions and configurations of switching barriers used traditionally in retail banking (Tesfom & Birch, 2010;Valenzuela, 2010) need to be examined afresh in the context of the growing usage of online retail banking services.…”

“…Factors that discourage customers from switching retail bank include search cost, transaction costs, learning costs, loyalty discounts and emotional costs (Pass, 2006 (Dowling & Staelin, 1994). Common used switching barriers are either rewarding or punitive or both in nature (Valenzuela, 2010). Most often banking companies erect rewarding as well as punitive barriers to retain existing customers (Valenzuela, 2010).…”

“…Common used switching barriers are either rewarding or punitive or both in nature (Valenzuela, 2010). Most often banking companies erect rewarding as well as punitive barriers to retain existing customers (Valenzuela, 2010).…”