Why do satisfied customers defect? A closer look at the simultaneous effects of switching barriers and inducements on customer loyalty

The purpose of this paper is to go beyond satisfaction as an indicator of customer loyalty and propose a holistic model of service switching in a mobile internet setting. The model, which reflects both barriers and inducements of switching, is developed based on the “mooring” and “pull” concepts in the migration literature.

Focusing on Generation Y mobile internet subscribers, the study analyzed a total of 417 usable questionnaire responses. Partial least squares structural equation modeling was used to test the research model.

The results show that first, satisfaction and switching barriers (i.e. a focal firm’s marketing innovation initiatives, switching costs, inertia, and local network effects) are positively related to customer loyalty; second, switching barriers have a stronger influence on customer loyalty compared with satisfaction; third, switching inducements (i.e. competitors’ marketing innovation initiatives, alternative attractiveness, variety-seeking tendencies, and consumers’ susceptibility to social reference group influence) is negatively related to customer loyalty and the relationship is weaker when perceived switching barriers are high.

This study empirically validates multidimensional scales of switching barriers and inducements from a more nuanced perspective, and specifies them as reflective-formative type II models. This study is among the first to use opposing dimensions to measure switching barriers and its counterpart. Hence, it illustrates how the two contrasting mechanisms can coexist in the minds of mobile internet subscribers.