Existing studies on the role of switching costs (SC) as moderator of the relationship between satisfaction and repurchase behavior are inconclusive. We attempt to explain these inconclusive findings by synthesizing an amplifying and a lock-in effect, and hypothesize a nonlinear moderating effect. In Study 1 (a main study and three replications), we find strong evidence for an inverted u-shaped moderating effect of overall SC. Our results suggest that satisfaction is a particularly important predictor of repurchase behavior in situations characterized by medium-levels of SC. Based on Prospect Theory, Study 2 (a main study and one replication) reveals that this inverted u-shaped moderating effect of SC is stronger for positive (relational and financial) SC than for negative (procedural) SC. We conclude with recommendations for satisfaction management of different customer segments, and describe possibilities to influence customer switching costs in various industries.
Bibliographical noteNOTICE: this is the author’s version of a work that was accepted for publication in Journal of retailing. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Nagengast, L, Evanschitzky, H, Blut, M & Rudolph, T, 'New insights in the moderating effect of switching costs on the satisfaction-repurchase behavior link' Journal of retailing, vol. 90, no. 3 (2014) DOI http://dx.doi/10.1016/j.jretai.2014.04.001
- customer retention management
- customer satisfaction
- hierarchical regression
- prospect theory
- repurchase behavior
- switching costs