Analysing firms' failures as determinants of consumer switching intentions

Abstract

Purpose The objective of this work is to provide evidence of customer switching intentions as a complex phenomenon involving a series of firm actions – service quality failures, unfair price, low perceived commitment and anger incidents – and factors relating to the purchase situation or the consumer that also play an important role as moderators in the dissolution process. Design/methodology/approach An empirical study has been carried out in the case of customers of car‐insurance firms. Findings Results demonstrate the existence of some factors that have a weak influence on the switching intention – service quality and company commitment – and other factors that have a strong influence and precipitate the consumers' decisions – price changes and critical incidents. This study also underlines the moderator role of knowledge about alternatives and switching costs in this process. Practical implications This findings show that a continuing dissatisfaction with the firm as a consequence of a quality that is poorer than expected does not influence individuals as much as a change in the price policy or a one‐off incident in which consumers experience a strong unease. Originality/value This work provides empirical evidence about the existence of various determinants of switching: variables that weaken the relationship and variables that precipitate dissolution. These categories had already been discussed theoretically in previous work, but their effect had not been tested. Moreover, it advances in the idea that switching intention may fundamentally be conditioned by consumers' level of involvement and their knowledge about other alternatives.

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