Understanding online customers' ties to merchants: The moderating influence of trust on the relationship between switching costs and e-loyalty

Michelle Carter, Ryan Wright, Jason Bennett Thatcher, Richard Klein

Research output: Contribution to journalArticle

24 Scopus citations

Abstract

Fostering customer loyalty is a key objective for online businesses. Initial transactions with new customers are less profitable than transactions with existing customers, making loyalty an important strategy. Drawing on research examining online customer loyalty (termed e-loyalty), switching costs, and trust, this study provides an empirical test of the relative influence of trust vs switching costs on e-loyalty for e-service providers. We further examine whether trust moderates the relationship between switching costs and e-loyalty. We propose that in the presence of high customer trust, e-service providers should have less need to rely on switching costs as a driver of e-loyalty. We test the hypothesized relationships using data collected from 299 repeat users of online travel services. Our results confirm that trust is a more important predictor of e-loyalty than switching costs. In addition, we find that the impact of switching costs on e-loyalty depends on the level of trust felt by customers. This study extends our understanding of customer loyalty, switching costs, and trust in e-commerce environments and provides practical, theory-driven guidelines to e-businesses seeking to develop customer loyalty programmes.

Original languageEnglish (US)
Pages (from-to)185-204
Number of pages20
JournalEuropean Journal of Information Systems
Volume23
Issue number2
DOIs
StatePublished - Mar 2014

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Keywords

  • customer loyalty
  • electronic business strategies
  • electronic commerce
  • switching costs
  • trust

ASJC Scopus subject areas

  • Information Systems
  • Library and Information Sciences

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