Understanding the mediating effect of switching costs on service value, quality, satisfaction, and loyalty

Abstract

This work examines the connections between service quality (SQ), service value (SV), customer satisfaction (CS), and customer loyalty (CL) within the healthcare industry. In addition, we seek to provide empirical evidence regarding the impact of different types of switching barriers, including procedural, financial, and relational costs, on these relationships. This is because switching costs are the key factors for maintaining and developing the relationship with the customer. The paper uses the Partial Least Squares Structural Equation Modeling (PLS-SEM) method for assessing the structure of - and examining - the valid data sample of 300 people, who have all experienced service from private healthcare in Ho Chi Minh City (HCMC), Vietnam. This paper is the first to study the three-dimensional switching costs (SC) (procedural, financial, and relational) as mediators of the CS-CL, and SV-CL relationships together in the private healthcare sector. The significant contributions of this paper include: (1) procedural, financial, and relational switching costs which have a determinant impact on customer loyalty (CL). Moreover, loyalty is also achieved through value given, and the pleasure of clients in the healthcare sector, (2) while customer satisfaction (CS) is a mediator of service value (SV) and CL, SV intervenes between the SQ and CS, (3) procedural/financial switching costs partially mediate the effects of the SV, CS, and CL relationships. Both academic contributions and managerial recommendations are provided by the results of this research in order to enrich the literature, and also to suggest that companies build stronger relationships with their customers and thus retain them.