The role of switching costs on service loyalty: a canonical correlation analysis

There have been mixed results regarding the impacts of satisfaction, service quality and service value on consumer loyalty. The purpose of this paper is to investigate the moderating effects of switching costs between the three antecedents and consumer loyalty via four loyalty dimensions, i.e. repurchase intentions, appreciating behavior, complaining behavior, and price‐increase tolerance.

A conceptual framework is developed where the canonical correlations among the antecedents and components of consumer loyalty are analyzed. Three hypothesis sets are proposed and tested based on 12 service industries in Hong Kong markets.

The findings provide strong evidence of the moderating effects on repurchase preference, but only partial support on the other three loyalty dimensions.

The above findings enable managers to adjust their strategies in response to varying levels of switching costs among services, which affect the relationships between the three primary antecedents and repurchase preference.

Consumer loyalty is considered as an important source of competitive advantages for service firms. Although potential antecedents of loyalty, including satisfaction, service quality and service value, have been identified, their influences on loyalty vary among different service industries. This research highlights the moderating effects of switching costs on the four consumer loyalty dimensions.