The different roles of switching costs on the satisfaction-loyalty relationship

Abstract

Purpose - The purpose of this paper is to develop and empirically test the antecedent, mediating and moderating role of switching costs on the relationship between satisfaction and loyalty. Design/methodology/approach - Competing models are proposed based on previous studies investigating the influence of switching costs on satisfaction and loyalty. A survey was conducted with 7,461 customers of a large Brazilian bank. The four competing models were tested using structural equation modeling technique. Findings - The analysis revealed that: switching cost is a significant antecedent of both attitudinal and behavioral loyalty; the mediating effect of switching cost is stronger in the relationship between satisfaction and attitudinal loyalty; and the moderating effect of switching cost is stronger in the relationship between satisfaction and behavioral loyalty. Practical implications - This study emphasizes the relevance of the switching cost construct in the banking industry. Customers with different switching costs levels will manifest distinct relationship between satisfaction and behavioral loyalty. Thus, investment on marketing strategies and campaigns should be oriented to better convert switching perceptions into effective loyalty considering its mediating or moderating effects. Originality/value - Even though there are several different approaches (i.e. direct, mediator and moderator) concerning the effects of switching costs on the satisfaction-loyalty relationship, there is a lack of integration between these approaches. The paper tests and compares the different roles of switching costs. Another contribution is the inclusion of both attitudinal and behavioral aspects of loyalty, given that the current literature is incipient concerning the role of switching cost when considering the distinct loyalty components. © Emerald Group Publishing Limited.