Modeling switching behaviour of direct selling customers

Abstract

The direct selling industry suffers a high turnover rate of salespeople, resulting in high costs of training new salespeople. Further costs are incurred when broken relationships with customers cause them to switch from one product supplier to another. This study identifies twelve factors that drive the switching behaviour of direct sales customers and examines the extent to which these factors influence switching. Exploratory factor analysis was used to assess the validity of these factors. The factors were represented in a model that posits that an interpersonal relationship between a direct sales person and a customer moderates the relationship between switching behaviour and loyalty. Structural equation modeling was used to test the proposed model. The author then discusses the empirical findings and their managerial implications, providing further avenues for research.