Analysis Of Switching Costs On Customer Loyalty In Effect

Customer loyalty has always been the focus of customer relationship management academia's attention since 1990S, and the influencing factors of which have also been well discussed. But in china, the effects of switching costs on loyalty are least referred in those researches on customer loyalty. So it is necessary to probe into the relationship between switching costs and customer loyalty with empirical analysis for the sake of comprehending customer loyalty intensively. Thus this study attempts to discuss and measure the effects of switching costs on customer loyalty with the survey of credit card services in Hangzhou.Through the research work, main conclusions are as follows:1) The switching costs can be distinguished as economic risk costs, evaluation costs, learning costs, setup costs, benefit loss costs, monetary loss cost, personal relationship loss costs and brand relationship loss costs according to the empirical results originally obtained by Burnham et al. (2003). In the case of credit card services, the survey results shows that the typology above is feasible and the eight switching cost can be perceived by customers exactly, but not all these switching costs are significantly correlated with customer loyalty, the customers' perceived switching costs differ across industries, and effects of switching costs on loyalty vary with industry characteristics.2) The switching costs are positively correlated with customer loyalty, and the correlation is more significant when the level of customer satisfaction is below average. Mostly switching costs act as a kind of switching barriers which can prevent the termination of a discontent business relationship.