Perceived Value, Reputation, Trust, and Switching Costs as Determinants of Customer Retention

Abstract

In service companies, maintenance and expansion of relational exchanges reinforce customer retention as a differentiator from the competition. In this research we developed and tested a theoretical model considering perceived value, service provider reputation, trust, and switching costs as determinants of customer retention. After that, a survey was done, and analysis of the results was performed using structural equation modeling with a sample of 269 client companies of corporate health plans. The contributions of the specified theoretical model, considering its uniqueness, proved that perceived value positively influences service provider reputation, service provider reputation has a direct impact on trust and switching costs, switching costs are configured as determinants of customer retention, and customer retention is positively influenced by service provider reputation in a relational context.

Mobile Banking Service Quality and Customer Retention: A Moderated Mediation Model of Customer Perceived Value and Perceived Corporate Image

“…These findings support previous research in customer relationship management which links customer perceived value and customer retention. For instance, Milan et al, (2015) established that clients in the corporate market are more willing to keep relationships with existing suppliers if they are being attended to with elevated value. The findings are also supported by the ideas of Carlos et al,(2006), who suggested that a relationship journey between a bank and its customer where both parties hope to obtain certain advantages and benefits (value) through the working and development of the relationship, the advantages that the service provider obtains from the relationship are linked to the loyalty of the customer.…”

Small business marketing strategies for physical therapy practice owners

“…Remarkably, the way a business owner's brand makes a customer feel can affect brand equity (Aaker, 1991;Milan, Eberle, & Bebber, 2015). The brand association has substantial value to brand managers.…”

Customer Loyalty and its Antecedents in Banking Service Rendering Context

“…The implication of this is that perceived value constitutes barriers to the exchange of supplier or service provider. Studies evidence that perceived value has a direct impact on service provider reputation (Milan et al, 2015a;Milan et al, 2015b). This way, the first research hypothesis was formulated: H1: Perceived value positively influences service provider reputation.…”

“…A service company, that constantly seeks for a good reputation, aggregates psychological value to its services and decreases the risks perceived by the customer in the (re)purchase process (Dowling, 2001) and that may create a narrow connection between the customer and the company (Milan et al, 2015b). This way, a good reputation besides increasing switching costs, helps shaping customers' future behavior in relation to the company (Davies et al, 2010), improving its image in the market (Fombrun, 1996) and empowering customers' loyalty (Dunn & Schweitzer, 2005;Bartikowski & Walsh, 2011).…”