Examining switching costs as a moderator in the relationship between Essay - 1

Examining switching costs as a moderator in the relationship between service personalization, customer satisfaction and customer - Essay Example The customers may get time saving in searching, locating and evaluating the alternatives services providers. They do not need to waste their time on learning. They do not need to spend their efforts, while switching to other vendors. In commercial view, customer loyalty is the key precondition for achieving success in e-business (Reichheld and Schefter 2000). Loyal customers benefit firm, since they bring additional revenues but require little attention from organizations. Loyal customers are more likely to forgive services handicaps and decreased price sensitivity. Committed customers generate positive work-of-mouth to others, enhance firms’ resistance to competition, and decrease the costs of selling. As a result, customer loyalty can be treated as a valuable asset. It is also a major source of sustaining continued profitability and organizational growth (Dick and Basu 1994; Anderson and Mittal 2000). The current state of research provides numerous definitions of custome r loyalty. In general level, customer loyalty defines the features and attitudes that consumers exhibit towards products, services, brands, and advertising messages. Customer loyalty signifies customer's willingness to re-buy, repeat patronage behavior over a period of time and a desire to continue and keep a continued relationship with the service providers (Dick and Basu 1994; Oliver 1999). (Anderson and Srinivasan 2003) described customer loyalty as a customer’s favored or chosen provider that leads them to behave positively toward a service provider with repeat patronage behavior. In general, customer loyalty in literature is conceptualized as a form of attitudinal behaviors in marketing and business (Jacoby and Chestnut 1978; Dick and Basu 1994; Oliver 1999; Casalo, Flavian et al. 2008). From an attitudinal perspective, it includes cognitive loyalty and affective loyalty. The customers want sustained relationships with their service providers. From the viewpoint of behavior, cognitive loyalty is a form of repeated patronage that sets the pattern for repeated purchases. Theoretically, whenever customers identify and choose the product or service they like, which meets their quality and price expectations, they are willing to use this product on a long-term basis; as a result, they are no longer concerned with searching for alternatives and become disinterested in competitive and advertising messages and threats. (Oliver 1999). (Oliver 1999) introduced four stage loyalty model; cognitive loyalty is the first stage, which is essentially about the quality of buying behaviors that are affected by customer’s individual characteristics and the circumstances, in which purchase takes place. Customers cannot be loyal to the brand, unless they have information about it. Loyalty develops when customers have sufficient information to decide that the brand is a preferable choice relative to other alternatives. Brand attitudes can be based on pri or knowledge of the brand or brand experiences. Affective loyalty is the second stage, when customers link their knowledge and experiences about the brand to this very brand. Conative loyalty is the third step. This is a very deep commitment by a customer that would like to