Switching Costs

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Switching Costs

In microeconomics, what one must spend in order to upgrade to a higher technology. For example, switching costs may involve purchasing a new, higher quality mobile phone. The higher the switching costs are for a consumer, the less likely that consumer is to adopt the higher technology.
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Customer satisfaction, trust and switching barriers play a major role in customer retention (Ranaweera and Prabhu 2003).
Additionally, switching costs and switching barriers are also viewed as key determinants of customer loyalty (de Matos et al., 2009; Lee et al., 2001).
As each of these choice factors could influence buyers of banking services and products this case study will examine how cause related marketing efforts may influence switching barriers (reduce barriers for potential customers and erect barriers for existing customers) that are more typically attribute based.
Faced with growing competition from new entrants, banks across the emerging regions should address trust and loyalty issues, particularly in South East Asia where digital banking has high adoption rates and lower switching barriers.
Until now, several researches have been done about the customer's loyalty and his or her oral advertisements after satisfaction, but about the habits of the consumer and social relationships and economic switching barriers in his/her loyalty in service industries, no research has been done.
Switching cost and switching barriers in mobile RFID services
Fornell (1992) considered that loyalty is a function of consumer satisfaction and switching barriers. Switching barriers consist of discounts for loyal clients, cognitive efforts customers would make to find another supplier and financial, social and psychological risks for buyers.