Virtual Switching Barriers: Switching barriers customer satisfaction as predictors of customer loyalty for online retailers

University essay from Handelshögskolan i Stockholm/Institutionen för marknadsföring och strategi

Abstract: Customer satisfaction is widely regarded as the best predictor and main cause of loyal customers – online as well as offline. Few previous researchers have focused on the concept of switching barriers and the role they play for customer retention. This is especially true in an online environment where the lack of physical barriers lead many people to assume that switching barriers play a marginal role for achieving customer loyalty. In order to investigate the role switching barriers play in an e-retailing environment, this thesis identify and classify different types of switching barriers according to what is relevant for online retailers. Based around this classification a survey was constructed and distributed to customers of – an online retailer of DVDs and computer and video games. Customer satisfaction and switching barriers were tested and contrasted with regards to how they affect different dimensions of customer loyalty. Further, switching barriers and customer satisfaction are often highly interrelated and their interconnectedness is thus explored. The results show that switching barriers seem to be at least as good, or in the case of behavioral loyalty better, at predicting customer loyalty online than satisfaction is. The results also indicate that switching barriers are highly interrelated with satisfaction and that switching barriers should not only be viewed as a barrier to exit but as an integral part of a company’s offering.

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