Reasons for Switching Service Providers

Abstract

This paper examines the reasons that people give for switching services. It is designed to test previous work and to extend knowledge by showing how the frequencies of different reasons vary by type of service. Unlike previous work using Critical Incident Technique (CIT), surveys are used to gather data on switching reasons. It is argued that CIT tends to select in favour of event-related reasons and against condition-related reasons. The research reveals a much lower frequency of event-related reasons for switching and more condition-related reasons compared with earlier work, particularly when services are delivered at a specific location. The research is extended to different types of switching. When customers have to switch, they often cited conditions; when they switch because of dissatisfaction with a supplier, they give more event-based reasons; when they discover a better supplier without previous dissatisfaction, they most often cite competition reasons. These findings have practical implications. First, previous work has claimed that service switching is preventable because event-related reasons can often be avoided by management; the present work, by showing that avoidable reasons are rarer, shifts the focus from customer retention to customer acquisition. Second, this work informs practitioners about the reasons that are likely to be given by defectors in their service category; this assists strategy decisions on retaining and acquiring customers.

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