Customer Inertia Research Articles

Online video platform perceived value, customer inertia, and customer retention basis for customer subscription motivation framework

Online video platform perceived value, customer inertia, and customer retention basis for customer subscription motivation framework

Customer Inertia: The Impact of Consumer Perceived Product Class Knowledge and Regret from Switch

Customer Inertia: The Impact of Consumer Perceived Product Class Knowledge and Regret from Switch

Inertia and Switching Intention Analysis of Muslim Customers to Switch to Sharia Banks in Indonesia Indra Suwandi and Nurdin Sobari

Purpose – The fact that the roles of Conventional Banking are still far dominant than Sharia Banking and keep growing show that most Muslims in Indonesia are inert to Conventional Banking. Unfortunately, research on this subject is very limited. This study aims to analyze the Inertia on Conventional Banking, and Intention to Switch to Sharia Banking of Muslim Customers. Design/methodology/approach – This is a quantitative research. Six antecedents of customer Inertia have been identified i.e.: Knowledge, Confusion, Similaritiy, Switching Costs, Satisfaction, and Religious Norms; and two antecedents of Switching Intention i.e.: Inertia and Satisfaction. 315 data from online survey were analyzed using SEM with the LISREL program, and Friedman Test with the PASW Statistics. Findings – That Knowledge and Similarities have significant negative effect; Confusion and Switching Costs have significant positive effect on customer Inertia; while Satisfaction and Religious Norms have no significant effect. Then that customer Inertia and Satisfaction have negative effect significantly on Switching Intention. Another important findings, there are significant difference of the levels of the customer Inertia, Satisfaction and Switching Intention indicators. Research limitations – provided. Practical implications – The findings are critical because provide clear directions for Sharia Banking in formulating the effective and efficient development strategy. Originality/value – This is a little of research which analyzes the inertia and intention to switch to Sharia Banking of Muslim customers in Indonesia completely. Type of paper – Research Article.

Optimal Pricing and Introduction Timing of Technology Upgrades in Subscription-Based Services

Many technologies that fuel subscription-based services improve over time. Examples are mobile phones, software suites (Microsoft Office, Adobe Creative Cloud), subscription services (Netflix), and cloud service providers. Additionally, modern subscription services are increasingly personalized to individual subscribers, and as a result, discriminatory pricing is ever-present in the marketplace, allowing firms to reward existing customers with discounts and special offers on upgrades. However, customers may be averse to switching to improved services because of costs related to redesigning business processes, downtime, or customer inertia. We propose a model of technology upgrades featuring discriminatory pricing based on customers’ upgrade experience. We characterize the optimal pricing policy for the service provider and develop an efficient algorithm for computing optimal prices. We also characterize the optimal timing of technology introductions and show that it is generally optimal to introduce new technologies in periodic intervals after some time.

Extension and customer reaction on sharing economy platforms: The role of customer inertia

The peer-to-peer economy has been on an impressive trajectory for a relatively short time and includes a broad array of platforms, business models, and transactions. It is important to understand how these platforms are extended and how customers evaluate them. We test a brand extension research model and validate it in the context of peer-to-peer sharing. We also examine the roles of the key factors that determine a brand extension’s success. Our findings illustrate that the first two factors have both direct and indirect effects, and the last one has indirect effects on the customer’s repurchase intentions. Moreover, for highly inertial customers, the fit of the parent brand with the extension has less of an impact on customers’ perception of quality regarding the extended brand. This research advances our understanding of how customers interact in peer-to-peer sharing contexts and provides insights into the marketing strategies needed on these platforms.

Health insurance policy renewal: an exploration of reputation, performance, and affect to understand customer inertia

The aim of the study is to understand the role of insurance company reputation, performance, and positive/negative affect on health insurance policy customer retention and the moderating influence of customer inertia. A structured questionnaire was used for data collection. Covariance-based structural equation modeling was employed to assess the hypothesized relationships between the variables. The findings revealed that reputation, performance, and affect influenced customer retention in insurance sector. Positive affect had greater impact on customer retention in comparison to other constructs. Further, customer inertia was an important moderating influence on the negative affect for health insurance policy customer retention. To the best of our knowledge, the present study is the first of its kind that attempts to investigate customer inertia in the health insurance sector in an emerging market context, i.e., India. Customer inertia has not been much studied in light of company reputation, performance, and positive and negative affect in the health insurance milieu. The research findings may help health insurance companies understand the importance of reputation, performance, customer retention, and inertia while marketing insurance services.

Conceptualizing a Cashless System for the Retail Banking Sector of an Emerging Economy: Policy Implications for the Nigerian Apex Bank

Though the disadvantages of a cash-based economy have led to a massive rollout of electronic systems of payment in many countries of the world; there are some academic evidences suggesting that the adoption and usage of electronic systems of transactions are still below expectations despite its acclaimed advantages. Although the Central Bank of Nigeria (CBN) joined other leading countries as they announced the cashless policy in 2011 and has subsequently introduced more stringent measures to implement the policy to date, there are doubts that the policy is for the good of all. Based on the insights obtained from innovation theory and cross-country comparison therefore, this paper investigated why the Nigerian economy is still far from being ready for a national rollout of the cashless policy. Findings show that the age distribution, income and educational level of an economy will likely shape the antecedents of consumers’ acceptance and usage of electronic transaction systems. The proposed conceptual model shows that the Nigerian economy is unready for a national rollout of the cashless policy. It was also predicted that a national rollout of the cashless policy will generate some labyrinths that may likely spell short-run difficulties for retail banking activities in Nigeria. Policy implications for the CBN and other emerging economies that hope to embark on similar policy were put forward. Key Words : cashless policy, trust, risk perception, transaction security, education age and income distribution, electronic payment system, customer inertia, innovation acceptance, innovation theories

Commercializing Sustainable Technologies by Developing Attractive Value Propositions: The Case of Photovoltaic Panels

Despite their promise for tackling environmental problems, sustainable technologies are difficult to move from niche to mass markets. They require firms to develop innovative business models. This article focuses on how firms can develop their value propositions to increase the market attractiveness of sustainable technologies that are economically attractive but are difficult to commercialize. The results are based on an analysis of six German utilities that developed offers for power supply self-sufficiency using photovoltaic technology. The article proposes four generic tactics firms can use to market this technology—simplify, mimic, configure, and engage—and describes and discusses how each of these tactics can help firms deliver and capture value. The study also compares and contrasts how firms combine tactics to increase the attractiveness of their value propositions. The article contributes to the growing literature on business models for sustainability and proposes recommendations to help sustainable innovation overcome customer inertia.

Determinants of Customer Inertia - An Investigation of Mobile Phone Services

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.

THE MEDIATION EFFECT OF INERTIA ON SERVICE DURATION

Firms devote large amounts of resources toward customer retention practices since relationship duration is a key driver in enhancing customer lifetime value. We posit that customer inertia plays an important role in determining service duration. In analysing service duration, we incorporate inertia into existing models that feature customer satisfaction, loyalty, and switching costs. A structural equation model is used to show the effect of latent mediation effect of inertia. We find that the mediating role of inertia is significant and the latent interaction effect of loyalty and inertia on service duration is also significant.

TESTING THE INFLUENCE OF INERTIA ON POST-RECOVERY BEHAVIOR

During the last decade, customer complaint management received considerable attention in marketing literature, e.g., researchers examined the consequences of a negative incident on customer attitudes towards the provider and the associated behavioral intention such as self-reported repurchase intentions ( e.g. Evanschitzky, Brock, and Blut, 2011; Smith and Bolton, 2002; van Doorn and Verhoef, 2008). However, this stream of research has not examined actual purchase behavior after the complaint (e.g., de Matos, Henrique, and Rossi, 2007). Hence, it is unclear whether service recovery only affects self-reported outcomes (i.e., purchase intention) or actual purchase behavior. Moreover, recent research has indicated that customer inertia explains a large proportion of the variance of a customer’s repurchase behavior (e.g. van Doorn and Verhoef, 2008). So far, no research has assessed the impact of inertia in the service recovery context. It is indicated that the relationship between the provider and the customer is strongly affected by the service failure (van Doorn and Verhoef, 2008), but as of now, the role of past behavior has not been investigated. This study contributes to the complaint management literature by (1) analyzing the effects of service recovery on actual purchase behavior after recovery and (2) by assessing the role of inertia in situations of service recovery. Results indicate that complaint satisfaction has a significant positive impact on post complaining purchase behavior while overall satisfaction has no such effect. Furthermore, past purchase behavior has the strongest impact; thus, inertia plays a substantial role in complaint management.

Inertia in services: causes and consequences for switching

PurposeThis paper aims to examine the antecedents of customer inertia (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs) and their relationship to customer satisfaction, service providers’ switching intentions and actual switching behavior. Customer inertia is said to reduce the incidence of service provider switching; however, little is known about the antecedent drivers of inertia.Design/methodology/approachThe conceptual model was tested by a longitudinal/discontinuous panel design using an online survey research of 1055 adult (i.e. +18 years old) subscribers to cell phone services. Partial least squares (PLS) path modeling was used to simultaneously estimate both the measurement and structural components of the model to determine the nature of the relationships between the variables.FindingsFindings of the PLS structural model provide support for the direct relationship between customer inertia and its antecedents (i.e. knowledge, confusion, perceptions of competitor similarity and switching costs). The results show that customer inertia has a moderate negative effect on the intention to change service providers but had no measurable effect on the actual behavior of changing service providers, other than indirectly, by influencing the perception of difficulty in switching some 11 months later. Further results from an analysis of indirect pathways of the antecedents to inertia show that switching costs are the only variable which indirectly reduce intentions to change service providers. The results also show that the effect of satisfaction on switching service providers is partially moderated by inertia. Importantly, these relationships are reasonably robust given past switching behavior and contract status of consumers.Research limitations/implicationsThe authors find evidence which explains some of the causes of inertia, and show that it has both direct and moderating effects on service provider switching intentions, though not necessarily the behavior of changing service providers. However, support was found for its indirect role through intent as an influence on switching behavior. Importantly, the authors find that inertia has lingering effects, in that it influences the perception of switching difficulties and, hence, behavior up to 11 months in the future.Practical implicationsManagerial implications are that service firms can profit from customer inertia through a reduction in churn. However, high levels of customer inertia over the longer term may increase the level of customer vulnerability to competitor offers and marketing activities, as satisfaction with the provider does not in itself explain switching intentions or behavior.Originality/valueThis study is the first study to contribute to an understanding of the antecedent drivers of customer inertia with respect to service provider switching and to empirically evaluate a variety of antecedent factors that potentially affect switching intentions. Importantly, the long lasting latent effect of inertia in indirectly influencing service switching behavior was found to persist some 11 months later.

The “I Love To Hate Them” Relationship with Cell Phone Service Providers: The Role of Customer Inertia and Anger

ABSTRACTThis qualitative study of both switchers and nonswitchers in the telecommunication service provider industry affords new insights into consumers’ switching behaviors and the role of inertia in the context of the telecommunications industry, and why people may avoid switching even when their circumstances allow them this option. What also emerges from this research is not only the effect of consumer perceptions of particular transactions, but also that the perception of the overall market conditions in terms of fairness and trust of all providers is an important basis for the consideration of switching.

Consumer governance in electricity markets

This paper examines switching decisions by households in the MainPower distribution area of New Zealand. The paper measures the extent to which customers switch retailers following the release of information about directors' bonuses, marketing surrounding firm ownership, and work by the New Zealand Electricity Authority to promote transparency of the switching process. We document strong customer inertia, which, for some consumers, has reduced following the Electricity Authority's interventions. Customer movements following information releases and marketing campaigns are modest, suggesting that prices and inertia may be the most important drivers of customer migration.

Open Access, Library and Publisher Competition, and the Evolution of General Commerce

Discussions of the economics of scholarly communication are usually devoted to Open Access, rising journal prices, publisher profits, and boycotts. That ignores what seems a much more important development in this market. Publishers, through the oft-reviled Big Deal packages, are providing much greater and more egalitarian access to the journal literature, an approximation to true Open Access. In the process, they are also marginalizing libraries and obtaining a greater share of the resources going into scholarly communication. This is enabling a continuation of publisher profits as well as of what for decades has been called "unsustainable journal price escalation." It is also inhibiting the spread of Open Access and potentially leading to an oligopoly of publishers controlling distribution through large-scale licensing. The Big Deal practices are worth studying for several general reasons. The degree to which publishers succeed in diminishing the role of libraries may be an indicator of the degree and speed at which universities transform themselves. More importantly, these Big Deals appear to point the way to the future of the whole economy, where progress is characterized by declining privacy, increasing price discrimination, increasing opaqueness in pricing, increasing reliance on low-paid or unpaid work of others for profits, and business models that depend on customer inertia.

Inertia and Customer Loyalty in the Varying Levels of the Zone of Tolerance and Alternative Attractiveness

ABSTRCT The main aim of the present research is to investigate influence of inertia on customer loyalty regarding to moderating role of the Zone of Tolerance (ZOT) and Alternative Attractiveness (AA); This survey studied mobile phone industry and The model consists of inertia as independent variables and customer loyalty as dependent variable and also zone of tolerance and alternative attractiveness as moderating variables. In this research, for collecting the data relevant to the under studied variable, a standardized questionnaire in the international researches was used and for studying the relationship between the research variables and hypothesis test, the path analysis model have been used. The conceptual model and hypothesis are tested using Structural Equation Models (SEM). Findings also indicate that customer inertia has a positive and significant impact on customer loyalty. While, in case of moderating variable, zone of tolerance not only strengthens the relationship between inertia and customer loyalty but also with wider ZOT reduces that of strengthen and alternative attractiveness have not effect on relationship between inertia with loyalty.

Open Access, Library and Publisher Competition, and the Evolution of General Commerce

Discussions of the economics of scholarly communication are usually devoted to Open Access, rising journal prices, publisher profits, and boycotts. That ignores what seems a much more important development in this market. Publishers, through the oft-reviled Big Deal packages, are providing much greater and more egalitarian access to the journal literature, an approximation to true Open Access. In the process they are also marginalizing libraries, and obtaining a greater share of the resources going into scholarly communication. This is enabling a continuation of publisher profits as well as of what for decades has been called unsustainable journal price escalation. It is also inhibiting the spread of Open Access, and potentially leading to an oligopoly of publishers controlling distribution through large scale licensing. The Big Deal practices are worth studying for several general reasons. The degree to which publishers succeed in diminishing the role of libraries may be an indicator of the degree and speed at which universities transform themselves. More importantly, these Big Deals appear to point the way to the future of the whole economy, where progress is characterized by declining privacy, increasing price discrimination, increasing opaqueness in pricing, increasing reliance on low-paid or upaid work of others for profits, and business models that depend on customer inertia.

An X-Ray of the Level of Electronic Purse Usage in Nigeria

This study sets out to examine the level of e-purse usage in Nigeria. Despite the invasion of e-purse as electronic banking channels that has the potential of disempowering the cash systems of exchange and granting firms competitive edge, it is interesting to note that the rate of cash usage still dominates in the Nigeria society. Thus, when compared with more advanced countries, less technically developed nations like Nigeria tend to be backward in terms of e-purse adoption and usage. The study results show that such factors as insecurity, erosion of privacy, customer inertia, operational difficulties and the like are the factors militating against e-purse usage in Nigeria. It is believed that if these inconsistencies are taken care of, the rate of e-purse acceptance will outweigh its present status in the near future.

Foreclosing Competition through Access Charges and Price Discrimination

This article analyzes competition between two asymmetric networks, an incumbent and a new entrant. Networks compete in non-linear tariffs and may charge different prices for on-net and off-net calls. Departing from cost-based access pricing allows the incumbent to foreclose the market in a profitable way. If the incumbent benefits from customer inertia, then it has an incentive to insist in the highest possible access markup even if access charges are reciprocal and even in the absence of actual switching costs. If instead the entrant benefits from customer activism, then foreclosure is profitable only when switching costs are large enough.

Foreclosing Competition through Access Charges and Price Discrimination

This article analyzes competition between two asymmetric networks, an incumbent and a new entrant. Networks compete in non-linear tariffs and may charge different prices for on-net and off-net calls. Departing from cost-based access pricing allows the incumbent to foreclose the market in a profitable way. If the incumbent benefits from customer inertia, then it has an incentive to insist on the highest possible access markup even if access charges are reciprocal and even in the absence of actual switching costs. If instead the entrant benefits from customer activism, then foreclosure is profitable only when switching costs are large enough.