Role of switching costs in the service quality, perceived value, customer satisfaction and customer retention linkage

Abstract

PurposeThe study attempts to chart out the role of switching costs in the interrelationships between perceived value, perceived service quality, customer satisfaction, and customer retention. The mediating role of switching costs as well as its direct impact is explored among customers of mobile telephone service providers in India.Design/methodology/approachThe conceptual model is developed based on the existing literature and then the model is validated through the analysis of data collected from customers of mobile services in India.FindingsThe mediating role of switching costs is found to have adequate statistical support and the other direct linkages are also found to be valid. The findings suggest that service firms may benefit from pursuing a combined strategy of increasing customer satisfaction and switching costs both independently and in tandem, depending upon the product‐market characteristics.Originality/valueThe study extends the knowledge about customer retention by bringing in switching costs as a part of the network of relationship involving perceived value, perceived service quality, and customer satisfaction.