Relational switching costs, satisfaction and commitment

Abstract

PurposeThis study attempts to understand the impact of relational switching costs and satisfaction on commitment as well as its impact on the satisfaction – commitment link in a supplier‐to‐manufacturer context in manufacturing.Design/methodology/approachThe data for this study were collected from the small and medium size manufacturing firms located in and around Mumbai. A total of 67 CEOs/business heads were randomly selected and personally interviewed with the help of a structured questionnaire.FindingsStudy strengthens the view that small and medium enterprises need to invest in relationships so that such investments are turned into relational switching barriers and they would thereby help in increasing customer retention. It also shows that if relational switching costs are higher, then even if satisfaction is lower the customer is less likely to terminate the relationship.Research limitations/implicationsFor marketing practitioners, the findings validate the long‐held belief that relationship marketing orientation is critical for business performance. However, data in this study were obtained from manufacturing firms, which are into plastics and light engineering sector. Replication of this study on a wider scale across different industries is essential for the generalization of the findings. Further, it could be useful to explore the complexities of the relationship between relational switching costs and other types of switching costs like the set‐up and financial costs.Originality/valueAlthough empirical studies have dealt with the customers’ switching behaviour, the concept of relational switching costs and its impact on other relational parameters is relatively new. This study's unique contribution is in this direction.