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Customer relationship dynamics: Service quality and customer loyalty in the context of varying levels of customer expertise and switching costs

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Abstract

As customer-organization relationships deepen, consumers increase their expertise in the firm’s product line and industry and develop increased switching costs. This study investigates the effects of customer investment expertise and perceived switching costs on the relationships between technical and functional service quality and customer loyalty. Technical service quality is hypothesized to be a more important determinant of customer loyalty than functional service quality as expertise increases. Both technical and functional service quality are hypothesized to have a reduced relationship with customer loyalty as perceived switching costs increase. Three-way interactions between the main effects of service quality, customer expertise, and perceived switching costs yield additional insight into the change in relative importance of technical and functional service quality in customers’ decision to be loyal. Six of eight hypotheses receive support. Implications are discussed for customer relationship management over the relationship life cycle.

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Authors and Affiliations

  1. University of Cambridge, UK

    Simon J. Bell

  2. Brock University, Canada

    Seigyoung Auh

  3. University of Melbourne, Australia

    Karen Smalley

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  1. Simon J. Bell
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  2. Seigyoung Auh
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Simon J. Bell (s.bell@jims.cam.ac.uk; Ph.D., University of Melbourne) is a university lecturer in marketing at the Judge Institute of Management, the business school of the University of Cambridge. His research has appeared in theJournal of the Academy of Marketing Science, the Journal of Retailing, theJournal of Business Research, Industrial Marketing Management, andMarketing Theory, among others. His.areas of research interest include organizational learning, sales force management and internal marketing, services and relationship marketing, and corporate social responsibility.

Seigyoung Auh (sauh@brocku.ca; Ph.D., University of Michigan) is an assistant professor of marketing at Brock University, Ontario, Canada. His research has been published in theJournal of Economic Psychology, theJournal of Business to Business Marketing, theJournal of Services Marketing, theJournal of Marketing Management, Industrial Marketing Management, and others. His research interests are in application of a resource-based view to marketing strategy, top management team diversity and marketing strategy, customer orientation (customer satisfaction) and loyalty, interface between marketing and entrepreneurship, and services and relationship marketing.

Karen Smalley (B.Comm. Hons, University of Melbourne) is an honors graduate in marketing at the University of Melbourne.

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Bell, S.J., Auh, S. & Smalley, K. Customer relationship dynamics: Service quality and customer loyalty in the context of varying levels of customer expertise and switching costs. JAMS 33, 169–183 (2005). https://doi.org/10.1177/0092070304269111

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