Channel Habits and the Development of Successful Customer-Firm Relationships in Services

Abstract

Technology advances have profoundly changed the way customers and service organizations interact, leading to a multitude of service channels. This study investigates consumer habits toward service channels in order to understand the influence of these channel habits on perceptions and intentions (perceived switching costs and attitudinal loyalty) and on consumer behavior (service usage and cross-buy). We empirically test the framework in the financial services industry, and the results reveal that physical store habit increases perceived switching costs and that acquired habits toward the physical store and self-service kiosks have a positive influence on attitudinal loyalty. Perceived switching costs positively affect service usage, and attitudinal loyalty positively influences cross-buy. In addition, habits in each channel lead to an increase in the number of services acquired (cross-buy), but online and self-service kiosks channel habits negatively impact service usage, as the lack of physical presence may increase customer uncertainty. Because habits are built on the frequency and stability of channel usage, firms can manage habits by encouraging frequent interactions under stable contexts. In addition, firms should stimulate customer habits toward the physical store as it is central to the promotion of loyalty and for increasing service usage.