Customer defection in retail banking

Abstract

Purpose – The purpose of this paper is to provide managers and researchers a comprehensive view of the root causes of customer departure and empirically test the attitudinal and behavioural consequences of failed service quality in a retail banking context. Design/methodology/approach – A quantitative study was conducted among retail banking customers who had defected from a large retail bank provider. Data from 989 usable responses to a questionnaire filled through a telephone survey were applied to model estimation through structural equation modelling. Findings – Findings demonstrate the effect of failed service quality on customers’ negative attitudes towards the retail bank provider (dissatisfaction and lack of commitment), the direct negative impact of failed service quality on loyalty (the opposite of defection), as well as its indirect negative impact on loyalty through negative attitudes. The moderating role of customers’ switching costs and subjective knowledge of the bank’s products is revealed and the relative impact of each failed service quality factor on negative attitudes and behavioural intentions is assessed. Practical implications – Key areas causing customer dissatisfaction and eventually defection are shown to bank managers, providing direction for implementing strategies and mechanisms in order to effectively reduce the defection rate. Originality/value – The theoretical model, which was in large confirmed through the empirical data, offers for the first time empirical evidence regarding the extent to which the general categories of reasons to defect in a service context identified in the literature are indeed causing customer exit.

Determinants of recovery satisfaction and service loyalty: the differing effects of service recovery system and service recovery performance

“…Johnston and Michel, 2008; Ogbeide et al ., 2017). However, given the fact that satisfied customers are not necessarily loyal toward the service provider (Piha and Avlonitis, 2015), examining RS as only an outcome variable is not beneficial. This is because RS is an affect variable and a beginning phase in the service recovery experience (Fernandes et al ., 2018; Mohd-Any et al ., 2019).…”

A Conceptual Analysis of Switching Costs: Implications for Fitness Centers

“…The results of the close examination of switching costs definitions reveal several limitations. First, 21.7% of scholars (n = 94) did not explicitly provide a conceptual definition e.g., [9,29]. This is a major omission because a formal definition of a construct is a starting point for theory development [25].…”

“…In this fitness market environment where other alternatives exist and where consumers become more demanding and less loyal, even a well-designed service offering and a consumer satisfaction program are not sufficient to achieve sustainable financial performance [7]. As such, retaining consumers in the mature fitness market has become a significant concern, and switching costs can serve as a tool to achieve business sustainability [8,9].…”

“…While providing quality service and creating satisfaction make it difficult for competitors to appeal to consumers, switching costs make it difficult for consumers to defect to competitors [8,11]. Therefore, practitioners should gain control over consumer loss by developing switching costs as a crucial marketing strategy for organizations' economic sustainability [8,9]. Sustainability 2020, 12, x FOR PEER REVIEW 2 of 17 practitioners should gain control over consumer loss by developing switching costs as a crucial marketing strategy for organizations' economic sustainability [8,9].…”

“…Therefore, practitioners should gain control over consumer loss by developing switching costs as a crucial marketing strategy for organizations' economic sustainability [8,9]. Sustainability 2020, 12, x FOR PEER REVIEW 2 of 17 practitioners should gain control over consumer loss by developing switching costs as a crucial marketing strategy for organizations' economic sustainability [8,9]. The breadth of a number of studies on switching costs, however, has led to the introduction of a plethora of conceptualizations (e.g., definitions, theoretical constructs) over the last few decades [12,13].…”