A Narrative Investigation of Consumer Non-Exit in Problematic Irish Retail Financial Service Relationships

Abstract

This study aims to provide understanding as to how customers remain in Irish banking relationships which they acknowledge to be problematic. While the banking industry asserts that inertia is the reason underpinning consumer inaction, the question remains as to how consumers rationalise the decision not to exit when dissatisfied. To this end, the literature review presents a synthesis of consumer relationship theory, dissolution theory and the role of inertia on consumer inaction. The methodology took an interpretative perspective applying a Narrative Analysis approach of fifteen varied participants in Dublin. In semi-structured life history interviews participants outlined their past experiences with financial institutions. The interviews generated a variety of stories and narrative excerpts that evidenced widespread influences on inaction behaviour. The first contribution is the identification of a neutral process operating within Irish banking relationships. Neutral interactions comprise of inert like behaviour but also includes the more complex behaviour of disaffect. Four levels of banking neutrality were identified; Choice Based Inertia, Constraint Based Inertia, Out of Mind Inertia and Disaffect. The study finds that these are mutually exclusive with unique motivations for engagement. However, it does formulate a link between Constrain Based Inertia and Disaffect. The second contribution is that disaffect provides a fresh theoretical explanation for consumer inaction. Disaffect is a permanent state of psychological distancing resulting in a decision to continue a relationship but remain detached. It is more valuable as a theory than dissatisfaction as the latter fails to explain why those who readily admit to on-going problems in their relationships fail to take the expected action, which is to move their business. Finally, the findings evidence the presence of a normative consumption effect in Irish consumer banking. This force exerts a mass inertial influence on consumer behaviour and is reinforced through experiences transmitted by way of socially traded stories. The narrative landscape aids feelings of regret minimisation, justification for inaction and provides consumers with a shared understanding of how to behave in financial relationships. This research shows that not only do stories provide a framework to defuse consumer anger, but their widespread influence generates an acceptance of inaction as a normal and justifiable behaviour, thus supporting inactivity and neutrality. The study substantiates the importance of neutrality, disaffect and socially traded stories to relationship marketing theory and demonstrates how they have implications for practitioners who wish to penetrate ‘inert’ customers. The prevailing banking narrative evidenced in this study is constructed, engendered and preserved by consumers. It undermines the effectiveness of marketing efforts to encourage loyalty and build long term sustainable relationships with customers. To counterbalance its effects equally powerful stories will be required by industry.