Issue No. 64 - April/May 2012
Why do people switch service providers?
by Dr David Corkindale and Dr David Corkindale
I regularly look through the academic marketing journals looking for papers that contain something useful in them for marketing and business practitioners - mostly a fruitless task, I’m afraid.
However, a recently published study (1) examines the reasons people give for switching services and the findings have some interesting and practical implications.
If service providers are to retain their customers, or attract those of competitors, they must understand why customers switch. If the reasons can be addressed, and eliminated, it should help retain customers who would otherwise leave.
If the reasons for customers leaving are mostly beyond the control of a service provider then devoting time and resources for customer acquisition may be the sensible way to maintain or even grow the business.
The study sought to find out the following:
• What frequencies of reasons for switching are found for location and non-location based services?
• What are the frequencies of the different types of switching?
• How do the different types of switching relate to reasons for defection?
• How does willingness to return to a previous provider relate to the main reason for defection?
The reasons for clients switching and the frequency of occurrence of these can be categorised as: eventrelated, or an episode (eg, a brief service failure) or condition-related which are more persistent (eg, inaccessibility of service, change of price, change of client need).
Also, services with a physical location for service ...