Determinants of Customer Inertia - An Investigation of Mobile Phone Services

Abstract

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.

Explaining resistance intention towards mobile HRM application: the dark side of technology adoption

“…Several studies found inertia was a crucial indicator of individuals' resistance behaviour (Polites and Karahanna, 2012; Auger et al. , 2016; Amoroso and Lim, 2017; de Mesquita and Urdan, 2019). In the mHRM context, employees are comfortable using the existing HRMS and do not want to take the risk of using a new platform.…”

Measuring the intention-behavior gap in service failure and recovery: the moderating roles of failure severity and service recovery satisfaction

“…Factors that explain a high SI yet no actual exit may include the unattractiveness of alternatives and customer inertia (de Mesquita and Urdan, 2019; Gray et al , 2017) as well as customer’s opportunistic behavior (Wirtz and McColl-Kennedy, 2010) by which customers take advantage of their high level of SI as a threat to seek compensation. On the other hand, seasonality may be a factor that explains the phenomenon of low SI with actual customer exit since the fitness industry is highly affected by it, such that the number of memberships significantly increases in certain seasons, such as New Year and summertime but decreases in other seasons (ACAD, 2018; Minton, 2003).…”

Status quo bias and risk tolerance in asset allocation decision-making.

“…2 LIPPI, ROSSI, AND SOANA new investments, inertia leads them to maintain the same risk level as that of their previous investments over time; thus, inertia can be described as maintenance of the status quo (De Guinea & Markus, 2009) or resistance to change (Mesquita & Urdan, 2019). Polites and Karahanna (2012) distinguish two dimensions of inertia: cognitive and affective.…”

“…Moreover, according to Dulebohn and Murray (2007), inertia refers to “the overall level of investment risk that the decision-maker has had a tendency to select in the past” (p. 551). In other words, when investors are considering new investments, inertia leads them to maintain the same risk level as that of their previous investments over time; thus, inertia can be described as maintenance of the status quo (De Guinea & Markus, 2009) or resistance to change (Mesquita & Urdan, 2019). Polites and Karahanna (2012) distinguish two dimensions of inertia: cognitive and affective.…”