Abstract
Purpose – In ongoing service sectors, some companies have high customer retention in spite of frequent consumer dissatisfaction and high complaint rates. This retention results from customer inertia. This paper aims to identify what influences this inertial behavior. Design/methodology/approach – Two competing conceptual models were conceived: a Base Model, which considers mediating effects, and a Rival Model, which considers only the direct effects on customer inertia. A survey was undertaken in Brazil. Mobile phone customers were targeted. A questionnaire was built and data were collected online as well as in person. Structural equation modeling was applied. Findings – Only direct effects on customer inertia were confirmed. The Rival Model outperformed the Base Model on a set of criteria (e.g., greater explanatory power for Customer Inertia and more simplicity). The Rival Model offers a moderate explanation (R 2 =0.370), some sound structural path coefficients, and appropriate psychometric properties for the latent constructs. Originality/value – The paper complements and adds to existing research by evaluating customer inertia as an important outcome within ongoing service markets. Market isomorphism, a new concept, is included in the analysis. Results from a developing country are described, helping to generalize to a broader set of countries.
Highlights
Relationship Marketing has provided many classic contributions around the world, such as the loyalty matrix (Dick & Basu, 1994), the loyalty phases and ultimate loyalty (Oliver, 1997, 1999), and the roles of trust and commitment (Morgan & Hunt, 1994; Garbarino & Johnson, 1999; Sirdeshmukh, Singh, & Sabol, 2002)
When the customer fully and consistently enjoys the quality and is satisfied with the goods/services, inertia should be a rational reaction. This is a preliminary set of possible antecedents of customer inertia and others must be identified and tested
This reflection gives rise to our research question: What are the main determinants of customer inertia? Our objective is to evaluate antecedents of customer inertia as well as a possible mediating construct
Summary
Relationship Marketing has provided many classic contributions around the world, such as the loyalty matrix (Dick & Basu, 1994), the loyalty phases and ultimate loyalty (Oliver, 1997, 1999), and the roles of trust and commitment (Morgan & Hunt, 1994; Garbarino & Johnson, 1999; Sirdeshmukh, Singh, & Sabol, 2002). The construct is misunderstood, and even undervalued by marketing researchers and professionals, despite it having been studied since the nineties (Assael, 1992; Bozzo, 2002; Ranaweera & Neely, 2003; Yanamandram & White, 2004, 2006, 2007; Wu, 2011). When the customer fully and consistently enjoys the quality and is satisfied with the goods/services, inertia should be a rational reaction. This is a preliminary set of possible antecedents of customer inertia and others must be identified and tested. This reflection gives rise to our research question: What are the main determinants of customer inertia? This reflection gives rise to our research question: What are the main determinants of customer inertia? Our objective is to evaluate antecedents of customer inertia as well as a possible mediating construct
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