Determinants of Customer Inertia - An Investigation of Mobile Phone Services

Abstract

Purpose

– In ongoing service sectors, some companies have high customer retention in spite of frequent consumer dissatisfaction and high complaint rates. This retention results from customer inertia. This paper aims to identify what influences this inertial behavior.

Design/methodology/approach

– Two competing conceptual models were conceived: a Base Model, which considers mediating effects, and a Rival Model, which considers only the direct effects on customer inertia. A survey was undertaken in Brazil. Mobile phone customers were targeted. A questionnaire was built and data were collected online as well as in person. Structural equation modeling was applied.

Findings

– Only direct effects on customer inertia were confirmed. The Rival Model outperformed the Base Model on a set of criteria (e.g., greater explanatory power for Customer Inertia and more simplicity). The Rival Model offers a moderate explanation (R̅²=0.370), some sound structural path coefficients, and appropriate psychometric properties for the latent constructs.

Originality/value

– The paper complements and adds to existing research by evaluating customer inertia as an important outcome within ongoing service markets. Market isomorphism, a new concept, is included in the analysis. Results from a developing country are described, helping to generalize to a broader set of countries.

Keywords
– Customer inertia; Switching avoidance; Antecedents; Mobile phone; Brazil