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The double-edged sword: The positive and negative effects of switching costs on customer exit and revenge

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  • Haj-Salem, Narjes
  • Chebat, Jean-Charles

Abstract

What happens when customers have to deal with switching costs after a service failure and a poor recovery? This study seeks to address this question by proposing and testing an integrative model that incorporates customers' negative emotions as mediators between switching costs and behavioral outcomes (i.e., loyalty and revenge). The model distinguishes positive from negative switching costs, and inward from outward negative emotions. Analysis of survey data from 280 real customers who actually experienced a service failure and poor recovery with a major telecommunications firm reveals that customers react to switching costs strongly, emotionally, and sub-optimally. In contrast to most findings in the service literature, the results indicate that negative switching costs generate both exit and desire for revenge. Paradoxically, positive switching costs generate both loyalty and an even higher level of desire for revenge. These findings have important implications for the service industry.

Suggested Citation

  • Haj-Salem, Narjes & Chebat, Jean-Charles, 2014. "The double-edged sword: The positive and negative effects of switching costs on customer exit and revenge," Journal of Business Research, Elsevier, vol. 67(6), pages 1106-1113.
    • Handle: RePEc:eee:jbrese:v:67:y:2014:i:6:p:1106-1113
    DOI: 10.1016/j.jbusres.2013.05.050
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    5. Chebat Elise & Roth Yefim & Chebat Jean Charles, 2020. "How Culture Moderates the Effects of Justice in Service Recovery," Review of Marketing Science, De Gruyter, vol. 18(1), pages 21-41, September.
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