Customer Satisfaction, Switching Costs and Customer Loyalty: An Empirical Study on the Mobile Telecommunication Service

Abstract

Previous research mentioned that Customer satisfaction and switching cost play an important role on customer loyalty. Based on empirical study, this present research attempts to evaluate the effect of the switching cost on customer loyalty and identify which one among switching cost dimensions and Customer satisfaction has the most influence on customer loyalty; then investigate the moderate effect of switching cost between customer satisfaction and customer loyalty link. To test the theoretical model, 300 questionnaires were self-administered to the subscribers of all mobile telecommunication providers in Madagascar and 273 questionnaires were returned with 253 questionnaires claimed efficient. Then SPSS 20.0 and regression method was used to establish the relationship between the dependent and independent variables. The findings indicate that there is significant relationship between switching cost and customer loyalty , then customer satisfaction and customer loyalty. It is also showed that among the dimensions of switching cost, financial cost has the most influence on customer loyalty. Even though switching cost shows up a strong effect to customer loyalty, it is always proved that satisfaction is the most significant cause to steer the loyalty from customers. The relationship between satisfaction and customer loyalty is moderated by the financial cost and relational cost.