Consumer switching costs: A typology, antecedents, and consequences

Abstract

The management of customer switching costs has been hampered by the lack of a comprehensive typology for conceptualizing, categorizing, and measuring consumers' perceptions of these costs. This research develops a switching cost typology that identifies three types of switching costs: (1) procedural switching costs, primarily involving the loss of time and effort; (2) financial switching costs, involving the loss of financially quantifiable resources; and (3) relational switching costs, involving psychological or emotional discomfort due to the loss of identity and the breaking of bonds. The research then examines the antecedents and consequences of switching costs. The results suggest that consumers' perceptions of product complexity and provider heterogeneity, their breadth of product use, and their alternative provider and switching experience drive the switching costs they perceive. Furthermore, all three switching cost types significantly influence consumers' intentions to stay with their current service provider, explaining more variance than does satisfaction.