DO PERCEIVED SWITCHING COSTS INFLUENCE CUSTOMER DYSFUNCTIONAL BEHAVIOR?

Switching costs are regularly used by service firms to retain customers. The literature advises managers to be careful when using these constraint-based retention strategies as customers may feel locked into the relationship with the firm and engage in dysfunctional behaviors and negative word of mouth (WOM). To better understand the underlying mechanisms, this research uses survey data from 241 banking customers to test the mediating role of customers’ self-determination perceptions between perceived switching costs and dysfunctional customer behavior and negative WOM. The study finds that different switching costs impact not only customer repurchase intentions, but they also lower the customers’ level of self-determination, which in turn increases the likelihood of dysfunctional behavior and negative WOM.