Switching Service Providers: Reasons, Service Types, and Sequences

Abstract

In Keaveney.s (1995) landmark study on the reasons for switching service providers, data were gathered using critical incident technique (CIT); here the original findings are tested using survey method. Keaveney.s typology of reasons for switching is supported across a range of categories but, in this new study, the reasons for switching occur at markedly different frequencies than in her study. A method effect could explain the disparity between the current and previous work on this subject. Extending Keaveney.s work, services that are delivered at a specific location are compared with services that lack this location constraint. In located services, such as restaurants, about half of all switching is based on access to the service; in non-located services, such as credit cards, access problems are minor and service failure is often the reason for switching. The orders of events, or sequences, involved in switching are also examined; different sequences are related to different sets of reasons for switching. These findings raise concern about using CIT to provide frequencies, initiate a debate about useful service segmentation, and indicate that attempts to increase customer retention in located services have limited potential because the reasons for switching are difficult to change in this type of service.