We further intend to expand on the broad categories identified, in the secondary research, namely relational benefits of staying, switching barriers, obligatory factors, and resonantly factors, creating subcategories within each category. The research would also alma to evaluate the positive and negative aspects of their relationships and the customer satisfaction levels against the same. A long term relationship Is highly beneficial to the firm. The company stands to gain from such a long term relationship making higher profits, since it is widely known that the cost of customer retention is lower than acquiring a new customer.
Also, a long-term customer is has been known to be instrumental in acquiring new ones. The four broad categories of lock-in factors re relational benefits of staying, switching barriers, obligatory factors, and personality factors. All the categories appear across both positive and negative relationships, although interesting differences in category prevalence between positive and negative relationships are insightful and discussed. In the majority of service relationships, participants mention multiple factors in regard to lock-in, rather than Just one factor or category.
Researchers In marketing have paid little attention to obligatory factors and personality factors and yet these factors are present In the ATA In a substantial way and occur In conjunction with the more well-studied factors. Do you know why your customers stay? Many service providers assume that the reasons are satisfaction and switching costs. While these are strong factors, our research shows that, in most service relationships, obligatory and personality factors also hold customers ‘locked in’ to the relationship.
The term “locked-in” to a service relationship refers to a customer who feels bound to the relationship and feels that he or she is unable or unwilling to leave the service provider. The customer may feel cocked in for either positive or negative reasons, and this lock-in may well be self- imposed rather than Just contractual. The reasons for switching service providers are usually associated with dissatisfaction with the service or competitor firms drawing the customer away.
In contrast, the reasons for staying in a service relationship are usually assumed to be limited to satisfaction with the core service or switching costs. Our research challenges that assumption. We conducted qualitative interviews with customers who felt locked into both positive and negative relationships. We uncovered four broad categories of lock-in factors: relational benefits/satisfaction, switching costs, obligatory factors, and personality factors. In the majority of these “locked-in” relationships, the participants mentioned multiple factors that they felt locked them in, rather than one factor or category.
Participants talked about service relationships where they felt they “could not easily leave or break up with” the provider. Each participant talked about one positive and one negative relationship. Different service provider types, from small local businesses to large corporations were discussed. The majority of the relationships were personal relationships, in which the provider and customer know each other and have a history of shared interaction (as opposed to interacting with the company, but not knowing anyone in particular).
Relational benefits/satisfaction were mentioned in 93% of the relationships, switching costs in 82% of the relationships, obligatory factors in 82%, and personality factors in 68%. These numbers vary little between positive and negative relationships, and provide an indication of the importance of each category in service relationships. Here, we discuss those that marketers rarely hear about: obligatory and personality factors. Obligatory factors are the reasons for staying that involve a sense of duty or responsibility to continue to do business with the service provider.
The participants discussed a sense of obligation to the service provider that we divided into four subcategories: (1) long history with the service provider or a sense of owing the provider, (2) the expectations of friends or family members, (3) a family member or friend provides the service, and (4) the need to help the service provider stay in business. The strongest obligatory factor for both positive and active relationships was having a long history with the provider or a sense of owing the provider.
The idea of staying because of a long history is similar to the sunk cost effect (responding to previous investments by becoming increasingly willing to invest additional resources). One woman said that she believes she should stay with her current pharmacist because she has already been with him for so long. Other respondents talked about the need to repay the provider for what they had done for them in the past, similar to the norm of reciprocity. The second most family members.
One man said that he remained with his mortgage lender because f a recommendation from his aunt. He wanted to leave, but felt his aunt might have negative feelings towards him if he did. The third subcategory under obligatory factors is that a friend or family member provides the service. A person’s relationship with their friends and family involves a deep sense of obligation and loyalty. This fits with Hamiltonians rule, which says that people prefer family when all other things are equal.
One woman said that her uncle owns an alarm company, and so she stays with the company because she truly feels that her uncle would be upset if she left. The final obligatory subcategory is the need to help the service provider stay in business. Supporting the business or helping the provider stay in business speaks to the duty or sense of responsibility that some customers feel. This idea showed up primarily in positive relationships. One individual said that she stays with her dentist because she feels a sense of loyalty to the professionals who do not leave her neighborhood.
While most of these subcategories emerged from personal relationships, we believe these can apply to larger organizations as well, but in different ways. For example, an individual may feel compelled to stay with a provider (an individual provider or a large organization) because of a recommendation from a friend or family member. Alternatively, a friend or family member may not directly provide the service, but may work for the organization. Leaving the provider may feel like indirectly harming that important person.
Finally, many large companies attempt to build relationships with individual customers or engage customers in some way. As customers get to know employees of the organization, these obligatory factors may become more prevalent reasons for staying. The personality factors found in this study represent stable traits of an individual that cause them to stay with the service provider. Two subcategories emerged from this factor: (1) the desire to avoid confronting others or hurting other people’s feelings and (2) resistance to change.
Individuals who avoid confrontation try to preserve the rapport that they have with others. This factor showed up more in negative relationships than in positive relationships. These individuals talked about how much easier it is to stay in the service relationship rather than confront the issue or problem or hurt the service provider’s feelings. One participant said that she would put up with anything until it gets out of hand because she is a very non-confrontational person (talking about her bank). One participant said that it would make her feel mean or uncaring if she left.
Individuals who are resistant to change prefer what is familiar to them and do not change their minds effortlessly. This personality characteristic showed up in both positive and negative relationships, but came up twice as often in positive relationships than negative relationships. Change is painful for people who are resistant to change, and these individuals want to keep their routine and stick to the tutus quo. One man said that he endures things that he finds unpleasant with his landlord so that he can maintain consistency.
Another man stated that he does not like change very much, and once he gets used to a certain provider, then he is going to continue going there (discussing his dentist). The findings from our research indicate that obligatory and personality factors play a substantial role in customer lock-in and that marketers need to consider both the positive and negatives aspects satisfaction and switching costs. Methodology We use in-depth interviews to examine service relationships that individuals might eel locked into or bound to (I. . , unable to break up with the provider). Although researchers have done much work on related topics, such as commitment, loyalty, and relationship marketing, the topic warrants exploratory research because the majority of the previous research focuses on satisfaction and switching barriers, and thus, all the reasons that customers stay in relationships have not been uncovered. The new ideas found here illustrate the usefulness and value of doing qualitative work in a well-researched domain.
In-depth interviews allow for a meaningful understanding of the topic from the customer’s point of view. Similar to and, the interviews focus on the perspective of the interviewees (I. E. , a phenomenological focus). Qualitative methods allow the researcher to obtain the intricate details related to the experience, such as the feelings, thought processes, and emotions that are difficult to learn through other research methods. Using a grounded theory approach, the themes discovered in this research emerge directly from the data.
Participants were located through recommendations and snowball sampling and were interviewed at a place of their choosing. The entire research is path breaking in the fact that, it involves both viewpoints. The perspective from the service provider is also incorporated in the report along with the customer’s views. The sample size for customers in each category was 15-20 and 2-3 service providers in each category. The interviewers asked participants to talk about their relationships with several service providers to whom they felt they “couldn’t easily leave or break up with” (I. . , felt locked into). The interviewers asked the questions twice-? once in regard to a relationship the participants felt “at least somewhat positively about” and then again about a relationship they felt “at least somewhat negatively about. Interviewers asked participants about both positive and negative relationships because a customer can feel locked into relationships that are positive as well as relationships that are negative. The order of the positive and negative relationship questions varied across interviews.
Interviewers used a discussion guide that probed the reasons why the individual felt locked into the service relationship. We extensively protested and revised the discussion guide as needed prior to data collection. Interviews were partly unstructured, allowing respondents to tell their stories as ouch as possible, but questions focused on the history of the service relationships, the reasons why they felt locked in, how they felt about the relationships, if they had tried to get out of the relationship, and what they would do if the provider moved or closed business.
The participants viewed a list of major service provider types initially to aid them in thinking about types of potential service providers. Data Collection With respect to the services chosen, we chose four different services – two on campus and three outside. The chosen services are: 1 . Laundry Services a. On campus: Ganges Dhobi b. Off Campus. MY Dhobi, SOB Road 2. Hairdressers c. On Campus: Hair Salon, Leave I. Trans Studio, Banner Road it. Rammers Hair Salon, next to Urban Village 3. Car Maintenance e. Off campus: iii. Mammoths Repair center, Us Goon ‘v. Car-cupid, Southward v.
Marti service center, SOB Road 4. Coffee Shops f. Off campus – FCC road v’. Barista vile. Cafe Coffee Day viii. The chocolate room The major reason for choosing these services were that we wanted to understand both from consumer’s point of view the keys reasons for their loyalty and also from service provider’s point of view the keys reasons for repeat orders/repeated visits and loyalty. We chose sample sizes depending upon the location. Major the sample size was kept at 15-20 for consumers and 2-3 for service providers to understand point of view of different service providers in terms of maintenance of loyalty.
Regular visits were done to service providers to understand the more prevalent reason for positive relationships between consumer and the service provider. Below mentioned is a sample format for questionnaire which was used during our interviews for all the 4 different services. They were customized accordingly and were kept unstructured for flexibility amongst the domains of the varying interview patterns. Sample Questionnaire for consumer: Laundry – My Dhobi; SOB Road – one to one interview and small focused group – Off campus survey 1. Do you do come here often? – Yes/ No 2. How often do you do your Laundry : a.
Once a week. B. Once every two weeks. C. Once every three weeks 3. Is this the only Laundry you come? – Yes/No 4. If No – where else you go and why 1. If yes, then rate these factors for reasons on the scale of 1-5, with 5 being the most important reason and 1 being least a. You trust them with their work/ satisfaction b. Convenience in terms of time c. Convenience in terms of ease of accessibility d. Unsure of better alternatives e. Procedural switching costs, too much trouble to find a new provider Resistance to change g. Recommended by family member or friend, or family uses or likes them 2.
If given an option to switch, will you switch- Yes/No 3. If yes, then why? 4. Would you like to make any changes in the functioning of your service provider? – Sample Questionnaire for consumer: Laundry – Ganges Dhobi vela – one to one interview – on campus survey 1. Do you use Laundry service? – Yes/No 2. If No – then what are the other alternatives you use? 3. If yes, then how often do you do your Laundry . C. Once every three weeks. . If yes, then rate these factors for reasons on the scale of 1-5, with 5 being the most important reason and 1 being least d. You trust them with their work/ a.
Convenience in terms of time b. Unsure of better alternatives c. Procedural switching costs, too much trouble to find a new provider d. E. Recommended by family member or friend, or family uses or likes them 1. If 2. If yes, then why and which other alternative will you prefer? 3. Would you like to make any changes in the functioning of your service provider? – If yes, then what would that/they be? Sample Questionnaire for Service Provider: Laundry – My Dhobi – en to one interview: 1 . How many people visit your Laundry on a regular day: a. Less than 10 b. 10-20 c. 20-30 d. More than 30 2.
Is the footfall similar for the entire day and week:- Yes/No 3. If no, which time of the day is the footfall highest and which day of the week? 4. Do you do anything different for times when footfall is most? If yes then what? 5. What percentage of your customer are regular customers? E. Less than 30% f. 30-50 % g. 50-70% h. More than 70% 1 . What do you think are the main reasons for their repeated visits? Rate these factors for reasons on the scale of 1-5, with 5 being the most important reason and 1 eyeing least a. Ease of accessibility b. Time for delivery c. Pricing e. Satisfaction f.
Relationship you share with the consumer 2. What are the steps taken from you end for ensuring their loyalty and repeat visit? 3. What according to you are the key reasons why your customers are switching? 4. What steps are you taking to curb the switching issue and to win back the lost customers? Sample Questionnaire for service Provider: Laundry – Ganges Dhobi on a regular day: the day is the footfall highest and which day of the week 4. Do you do anything 6. What do you think are the main reasons for their repeated visits? Rate these I. Ease of accessibility J. Time for delivery k. Pricing l.
Unsure of better alternatives m. Satisfaction n. Relationship you share with the consumer 7. What are the steps taken from you end for ensuring their loyalty and repeat visit? 8. What according to you are the key reasons why your customers are switching? 9. Customers? Analysis The demographic profile of the interviewed consumer is presented in the table below. The varied profile shows that the findings relate to the general consumer and to no segment in particular. The findings of this study are primarily predicts the factors relating to consumers in India, western India in particular.
