Customer Switching Costs and its Correlates in the Turkish Credit Card Market

Abstract

In recent years, service quality, trust, corporate image and switching cost are mainly viewed as the primary determinants of repeat choice behavior. In the literature, according to many authors, switching costs have (1) financial switching cost, (2) procedural switching cost and (3) relational (psychological) switching cost. Each type also composed of multiple facets. The aim of this study is to determine customer switching costs the credit card market and to form a third-order measurement model and to examine the associations among switching cost., loyalty, service quality, trust and corporate image. Firstly we examined the concept of switching cost and determined all the facets. Secondly, the relationships among all the variables were analyzed by the confirmatory factor analysis (CFA). The findings from CFA show that the switching cost is explained by monetary loss, benefit loss, evaluation, learning, set-up, uncertainty and relationship loss cost. Also there is no significant association between customer loyalty and monetary loss and learning cost because of the competition in the Turkish credit card market. Uncertainty and relationship loss cost are associated with customer loyalty. On the other hand, the most important factors affecting customer loyalty are trust, perceived service quality and corporate image, respectively.