The Driving Forces Behind Customer Retention in a Digitized World: Evidence from India (A Partial Least Squares Approach)

Abstract

This study seeks to develop and empirically validate a customer retention model. Based on past studies in the marketing research, we compiled a comprehensive set of constructs and hypotheses and established causal relationships between them. To measure the variables enumerated in the conceptual framework, a well-structured questionnaire was designed. Evaluation of the model with the help of AMOS-SEM was considered initially; however, due to the complexity of causally interlinked relationships in a conceptual framework (as the presence of serial and simple mediations), the results were analyzed using AMOS-SEM and partial least squares structural equation modeling (PLS-SEM) approach together. Contrary to some assertions in the past literature, the results suggested inertia has a positive relationship with customer satisfaction. Furthermore, quantitative analysis supported by empirical qualitative pieces of evidence from the survey exhibited that partial mediations were found among the constructs. The empirical results as hypothesized illustrate (a) customer loyalty was positively influenced by customer satisfaction, switching barriers, perceived price fairness, and trust and (b) inertia has no significant influence on customer retention and customer loyalty but found to be positively associated service quality. In conclusion, the managerial implications, limitations, and suggestions for future research are provided.