On the relationship between perceived service quality, service loyalty and switching costs

TLDR

Service loyalty requires further conceptual and empirical investigation in services marketing literature. The paper develops a theoretical framework for service loyalty comprising preference loyalty, price indifference loyalty, and dissatisfaction response. The framework examines service quality and switching costs as antecedents to the three dimensions of service loyalty. An empirical study across five service industries confirms the three‑dimensional construct, shows industry‑specific variations in service quality’s influence, and finds that low switching costs are associated with lower loyalty.

Abstract

In the services marketing literature it has been argued that the concept of service loyalty needs further conceptual and empirical investigation. In this paper a theoretical framework for service loyalty consisting of three dimensions: preference loyalty; price indifference loyalty; and dissatisfaction response is developed. We subsequently focus on the role of service quality and switching costs as antecedents to these types of service loyalty. The results of an empirical study of a large sample of customers from five different service industries provide support for service loyalty as a three‐dimensional construct. Moreover, we find that the influence of service quality on service loyalty varies significantly per industry and that, hence, findings from one industry cannot be generalised to other industries. Furthermore, we establish that in industries characterised by relatively low switching costs, customers will be less loyal as compared to service industries with relatively high switching costs.