Determinants of Customer Inertia--An Investigation of Mobile Phone Services.
| Autor | Carvalho de Mesquita, Jose Marcos |
1 Introduction
Relationship Marketing has provided many classic contributions around the world, such as the loyalty matrix (Dick & Basu, 1994), the loyalty phases and ultimate loyalty (Oliver, 1997, 1999), and the roles of trust and commitment (Morgan & Hunt, 1994; Garbarino & Johnson, 1999; Sirdeshmukh, Singh, & Sabol, 2002). This research stream permeates the Brazilian marketing academia (Barreto, Crescitelli, & Figueiredo, 2015).
On the other hand, inertia influences customer retention even without any genuine relationship marketing initiative. However, the deficiency in terms of explaining customer inertia still persists (Khedhaouria, Thurik, Gurau, & van Heck, 2016). D'Alessandro, Johnson, Gray, and Carter (2017, p.1) even say that "little is known about the antecedent drivers of inertia". The construct is misunderstood, and even undervalued by marketing researchers and professionals, despite it having been studied since the nineties (Assael, 1992; Bozzo, 2002; Ranaweera & Neely, 2003; Yanamandram & White, 2004, 2006, 2007; Wu, 2011).
Costumer inertia can be classified as spurious loyalty (Dick & Basu, 1994), characterized by repeated purchases from the same supplier despite the lack of a favorable attitude towards it. In some sectors, especially those of ongoing services (such as fixed and mobile telephones, and credit cards), consumer inertia always appears. As a result, despite consumer dissatisfaction, disappointment, and high complaint rates, a company can maintain high customer retention rates (Zeelenberg & Pieters 2004; Yanamandram & White, 2004). Spurious loyalty is associated with the absence of a superior alternative. In some ongoing service sectors, there are alternatives (although few), yet their offerings, through the eyes of the clientele, appear to be equivalents. Customer inertia seems to be a consequence of an attitude of passiveness (no intention to change a behavior) because alternative providers are seen as quite similar and not satisfactory. Customer inertia could also be impacted by switching avoidance, a personal state characterized by resistance to change, and avoidance of new circumstances and agents. Moreover, when the customer fully and consistently enjoys the quality and is satisfied with the goods/services, inertia should be a rational reaction. This is a preliminary set of possible antecedents of customer inertia and others must be identified and tested. This reflection gives rise to our research question: What are the main determinants of customer inertia? Our objective is to evaluate antecedents of customer inertia as well as a possible mediating construct.
2 Hypotheses Development and Conceptual Models
This section i) reviews the literature on Customer Inertia and some of its potential antecedents, and ii) elaborates associated hypotheses that comprise two Conceptual Models.
2.1 Customer Inertia
In physics, inertia is a property of matter that keeps an object in motion moving in the same direction or keeps an object at rest (stationary), unless an external force is applied on it (Young & Freedman, 2008). In a broader view, inertia is the tendency of all objects in the universe to resist changes to their state of motion (stationary or moving), and to continue doing what they are doing (unless acted on by a greater outside force).
Inertia is also a relevant concept for many human phenomena, taken as a metaphor and associated with resistance to change. Decision inertia, for instance, is the "tendency to repeat previous choices independently of the outcome, which can give rise to perseveration in suboptimal choices" (Alos-Ferrer, Hugelschafer, & Li, 2016, p.1); that is, it is directly related to preference for consistency. People can be subject to inertia with respect to their attitudes and beliefs about themselves and the world, the emotions they feel, the decisions they make, and the actions they carry out, irrespective of previous beneficial or harmful consequences.
Of direct interest in this paper, Customer Inertia is referred to as: (i) a consistent pattern of buying the same brand almost every time a consumer shops, out of habit, merely because less effort is required (Solomon, 1994); (ii) repeated patronage of a supplier despite the lack of a positive attitude towards it; (iii) repeated purchases devoid of assessments, featuring unconscious procedures (Huang & Yu, 1999); (iv) an absence of goal-directed behavior (Zeelenberg & Pieters, 2004). This rich array represents facets of the same construct as well as different ways it can be explained.
Some authors describe Customer Inertia as a driver for repeated purchases (Yanamandram & White 2004, 2007; Ranaweera & Neely 2003) or even for loyalty (Wu, 2011). Let us provide further clarification. Oliver (1997, 1999) outlined four phases of customer loyalty. The last one, 'action loyalty', involves 'action inertia', in which repeated purchases become a reflex of habitual action, as a result of strong commitment to repurchasing the brand, combined with a desire to overcome obstacles to carry out the acquisition. That is the concept adopted in this paper, which features repeated patronage without a positive attitude.
According to Bozzo (2002), consumers can be tangled "in an inert pattern in order to reduce their cost of thinking or just because they show limited interest towards the alternative brands on the market" (p. 2), leading to Customer Inertia as an outcome. As an outcome the construct has both attitudinal and behavioral antecedents.
A well-known framework presents three generalized antecedents of attitude: cognitive (information regarding the object), affective (feelings related to the object), and conative (inclinations to act toward the object) (Dick & Basu, 1994). Applying this framework, we now focus on possible relationships of Customer Inertia to its: (a) cognitive antecedents: Market Isomorphism, Perceived Service Quality, and Unattractiveness of Alternatives; (b) affective antecedent: Satisfaction; and (c) conative antecedents: Switching Barriers and Switching Avoidance.
2.2Market Isomorphism
Market Isomorphism has to do with the homogeneity of providers, meaning that their performed processes and delivered outcomes are almost the same. At the extreme of Isomorphism, everything one company does and offers, its competitors do and offer too. The world has seen a growing similarity among competing organizations in various aspects, such as in products, pricing, and promotion. Many firms strive for competitive advantage through differentiation (i.e., delivering higher levels of valued benefits to one or more segments). These first-rate benefits, however, are often copied (even quickly), a fact that dampens competitiveness (Porter, 1998). A differential edge could be maintained if rooted in unique and difficult to imitate elements (Vasconcelos & Cyrino, 2000), but this is a huge challenge. Eventually, many firms end up providing similar goods and services in the customers' eyes, forming a homogenized sector. This is Market Isomorphism.
'Isomorphism'--a term from Institutional theory (Meyer & Rowan, 1977)--is a process that compels one organization to resemble another, when they compete under the same environmental conditions (Dimaggio & Powell, 2005). Such 'mimetic isomorphism' requires a permanent battle for a renewed advantageous position. Nowadays, equivalent players are common in countless sectors.
From a broader perspective, Gimenez, Hayashi Junior, and Grave (2007) observed isomorphic strategies, both current and future, in industries from diverse sectors, such as electronics, clothing, metallurgy, and leisure. Rossetto and Rossetto (2005) describe the influence of institutional isomorphism on strategic development for construction firms, indicating mimetic and coercive isomorphisms as being the most important.
Among the aspects they researched, Zacharias, Figueiredo, and de Almeida (2008) observed similarity in the banking industry, in terms of products and services. Urdan and Zuniga (2001) verified similar goods manufactured by competing firms, identifying service differentiation as a possible source for competitiveness. Mesquita and Lara (2007) reported similar pricing by supermarkets in a big city, despite the different income levels of their target markets. Pereira Filho, Campos, and Nobrega (2015) identified great similarity between fast food restaurants in Brazil. They evaluated 45 attributes concerning service quality in 15 restaurants, and out of 675 possible scores, 496, or 73.5%, were below the average rate customers expected. The physical evidence used by hospitals and hotels is very similar, as shown by Mendonca, Barbosa, and Durao (2007), when studying the Brazilian hospitality industry. Thus, Market Isomorphism makes sense as a concept, as a summarization of many concrete observations and to describe what they have in common.
Bowen (1990) found that customers do not see any striking distinction between service providers from various sectors (e.g., fast-food restaurants and theme parks). In the cell phone business, Mesquita, Martins, and Bastos (2015) identified a positive relationship between: a) isomorphism and inertia; and b) the customer service gap and inertia. If a potential customer is unable to distinguish service (or goods) providers in terms of benefits, the chosen supplier does not matter for him/her. In this case, irrespective of the vendor, the customer thinks that the quality received will be almost the same, which decreases the incentive to switch to another provider. That is the rationale for the following two hypotheses.
H1a--Market Isomorphism is positively related to Unattractiveness of Alternatives.
H1b--Market Isomorphism is positively related to Customer Inertia.
2.3 Perceived Service Quality
Perceived Service Quality is the difference between perceptions and expectations. Service perceptions are the customer's judgments regarding the excellence of a service...
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