Reducing temptation to switch mobile data service providers over time. The role of dedication vs constraint

DOIhttps://doi.org/10.1108/IMDS-07-2017-0326
Publication Date10 Sep 2018
Pages1597-1628
AuthorStephanie Hui-Wen Chuah,Philipp A. Rauschnabel,Ming-Lang Tseng,T. Ramayah
SubjectInformation & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems
Reducing temptation to
switch mobile data service
providers over time
The role of dedication vs constraint
Stephanie Hui-Wen Chuah
School of Management, Universiti Sains Malaysia,
Penang, Malaysia
Philipp A. Rauschnabel
Faculty of Business, Universität der Bundeswehr München,
Neubiberg, Germany
Ming-Lang Tseng
Institute of Innovation and Circular Economy,
Asia University, Taichung, Taiwan, and
T. Ramayah
School of Management, Universiti Sains Malaysia, Penang, Malaysia
Abstract
Purpose The purpose of this paper is to propose a dedication-constraint-temptation (DCT) model to study
the factors influencing customersloyalty to mobile data service (MDS) providers. The DCT model explicitly
explores the important yet overlooked role of alternative attractiveness (the temptation-based mechanism) as
a mediator and the boundary condition of their interrelationships (e.g. relationship length). The model also
integrates new and established antecedents of customer-based brand equity (C-BBE) (the dedication-based
mechanism) and switching barriers (the constraint-based mechanism).
Design/methodology/approach The proposed model is tested using partial least squaresstructural
equation modeling with a sample of 331 MDS users.
Findings The results indicate that C-BBE has an indirect effect on customer loyalty (via alternative
attractiveness) in both relationship groups (shorter- vs longer-term). However, the indirect effect of switching
barriers on customer loyalty only exists in longer established relationships. The results from multi-group
analysis reveal that the effect of switching barriers on alternative attractiveness significantly differs across
groups. In addition, customer value anticipation and procedural switching costs appear to be the most salient
antecedents of C-BBE and switching barriers for both groups.
Originality/value This study makes an incremental contribution by incorporating the temptation-based
mechanism as a mediator and relationship length as a moderator into the dedication-constraint model. This
study also extends the information systems and brand management literatures by demonstrating the
strategic importance of customer value anticipation in the information and communication technology brand
equity-building.
Keywords Switching barriers, Brand equity, Customer loyalty, Relationship length,
Alternative attractiveness, Dedication-constraint-temptation model, Mobile data service
Paper type Research paper
1. Introduction
The invention of mobile phones has ushered in a new era of information and communication
technology (ICT), changing peoples lives in a substantial way (Tseng et al., 2017).
The ever-escalating competition in the ICT service market is the result of rapid technology
evolution that accelerates the pace of innovation (Xu et al., 2014). To survive in the
technologically fast-paced, competitive business environment, mobile communication
companies keep rolling out cutting-edge technologies. This is exemplified by successive
Industrial Management & Data
Systems
Vol. 118 No. 8, 2018
pp. 1597-1628
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-07-2017-0326
Received 26 July 2017
Revised 4 November 2017
27 December 2017
1 January 2018
Accepted 1 January 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
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Role of
dedication vs
constraint
mobile communication systems, such as 2G, 3G, 4G, and 5G, in which each new generation is
an incremental upgrade to its predecessor (Xu et al., 2010, 2014). For example, compared to
its previous technology platforms, the current 5G technology supports new services, such as
virtual reality, ultra-HD video, self-driving, and smart homes. These developments have
revolutionized the way mobile services are being offered and assessed. Apart from voice
services, mobile communication companies now also offer a variety of data services,
ranging from instrumental-oriented services such as navigation service to hedonic-oriented
services such as music and video streaming as well as mobile gaming (Kim and Han, 2011;
Ofori et al., 2018).
Induced by constant service innovation from competing firms, consumers tend to switch
MDS providers frequently, resulting in high customer churn rates (Xu et al., 2014). As such,
figuring out the way to reduce the temptation of competitorsoffers is of great concern to
MDS providers, especially those who invest heavily in loyalty-building initiatives. Extant
research contains various theories to explain customer loyalty. Social exchange theory
(SET) (Thibaut and Kelley, 1959), one of the most prominent theories, describes positive and
negative motives for engaging in and maintaining exchange relationships (Lee et al., 2014;
Wulf and Odekerken-Schröder, 2001). The dedication-constraint model, developed from
SET, holds that customers maintain relationships with firms because they either genuinely
want toor because have to.The former is defined as the desire of individuals to engage
in ongoing relationships because of the prospect of long-term mutual benefits, while the
latter refers to forces that compel individuals to stay in relationships (Bendapudi and Berry,
1997; Zhou et al., 2012).
Although the dedication-constraint model has been used extensively to elucidate
factors that underpin customer loyalty in various settings, little is known about their
effectiveness in diminishing the attractiveness of competitors over time. The omission of
the temptation-based mechanism (e.g. alternative attractiveness) in the dedication-
constraint model is especially surprising because a more attractive alternative amplifies
thetemptationtobedisloyal(Melnyk, 2014, p. 336). Cognitive dissonance theory (CDT)
(Festinger, 1957) postulates that individuals experience conflict when deciding between
available alternatives. To reduce dissonance, consumers tend to increase the perceived
attractiveness of the chosen brand and devalue the brand not chosen (Tanford and
Montgomery, 2015). This suggests that before becoming loyal to a brand, the individual
must first perceive the alternatives to be unattractive. While alternative attractiveness
could serve as an intermediary between dedication-constraint factors and customer
loyalty, its mediating effect has not been hypothesized nor empirically evaluated. In
addition, limited scholarly efforts have been made to explore the differential effects of
DCT mechanisms across different lengths of customerprovider relationship. Differences
likely exist because newer and older customers may place different emphasis on different
attributes in making loyalty decisions (Wang and Wu, 2012). If this holds true, MDS
providers should not apply one-size-fit-all approach for their loyalty development
strategies. To improve the cost-effectiveness of the strategies, a number of questions need
to be tackled. For example, should MDS providers invest much in erecting switching
barriers or should the resources be allocated to elevate customer satisfaction? How do
these mechanisms evolve over the course of customerprovider relationship?
Prior research in the information systems (IS) domain has commonly cited customer
satisfaction and switching barriers/costs as dedication- and constraint-based mechanisms of
loyalty (e.g. Kim et al., 2015; Kim and Son, 2009; Lin et al., 2015). However, El-Manstrly (2016)
argued that customer satisfaction is a necessary but insufficient condition for loyalty
nourishment. In fact, a meta-analysis conducted by Szymanski and Henard (2001) indicated
that satisfaction explains less than 25 percent of the variance in repurchase.
Hence, Pansari and Kumar (2017, p. 294) noted that satisfaction need(s) to be evolved
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to a higher level, a level of desired differentiation and of sustainable competitive advantage.
In this sense, identifying a more promising dedication-based mechanism and
understanding how it works with the constraint-based mechanism is essential to
achieving customer loyalty.
Customer-based brand equity (C-BBE), defined as a consumers personal identification
with a brand and the brands relevance to the consumers personal situation, has gained
renewed prominence with the rapid proliferation of MDS brands (Johnson et al., 2006;
Xu et al., 2014). Faced with intensifying competition, where products and services have
reached commodity status, C-BBE is increasingly viewed as the key intangible asset
that helps a firm differentiate itself from competitors (Chatzipanagiotou et al., 2016;
Çifci et al., 2016). Strong C-BBE can potentially be created through proactive anticipation
of customer needs, the provision of customized service, and satisfactory experience
(Homburg et al., 2003; Xu et al., 2014; Zhang et al., 2016). In a dynamic business
environment characterized by rapid technology evolution and constant changes in
consumer lifestyles, firms particularly must have the capacity to anticipate an d innovate
their products and services in accordance with customersevolving needs (Gürhan-Canli
et al., 2016; Zhang et al., 2016). Despite its promise as a sustainable competitive advantage,
the role of customer value anticipation in building C-BBE remains under-explored.
Furthermore, research that simultaneously examines C-BBE and switching barriers as the
dedication- and constraint-based mechanisms of loyalty remains scarce.
To address these gaps, we proposed the DCT model of loyalty, which is grounded in SET
and CDT. The new model is different from the existing dedication-constraint model in that it
explicitly considers the mediating effect of temptation-based mechanism and the boundary
condition of relationship length; steps away from customer satisfaction the traditional
dedication-based mechanism and suggests that C-BBE is a more promising construct;
and moves beyond customizationpersonalization control and customer satisfaction and
introduce customer value anticipation as a new antecedent of C-BBE.
We tested the DCT model among 331 MDS users and analyzed it using partial least
squaresstructural equation modeling (PLS-SEM). These findings contribute to theory in
several ways. First, we found that newer customers rely solely on C-BBE, whereas older
customers depend more on switching barriers and less on C-BBE, in making loyalty
decisions. Second, the effect of switching barriers on alternative attractiveness significantly
differ across newer and older customers. Third, we showed the relevance of customer value
anticipation in building strong C-BBE in both groups. These findings extend the dedication-
constraint model and ICT brand management research with a novel loyalty framework and
help managers develop loyalty strategies that effectively adapt to customers of different
relationship lengths.
2. Theoretical background and model development
2.1 Customer loyalty and the underlying theories
The concept of customer loyalty is continually evolving (Ngobo, 2017). It has progressed
from behaviors, measuring a customers loyalty by his or her propensity to purchase
products and/or services from the same brand repeatedly over time ( Jacoby and Chestnut,
1978), to an attitudinal concept, which focuses on psychological aspects, such as a
consumers preferences, commitment, or purchase intentions toward a brand (Mellens
et al., 1996) and, more recently, to a composite approach, which suggests that repeat
purchase behavior and attitudinal preference are necessary conditions for true loyalty
(Toufaily et al., 2013). Because the behavioral measure has a profound impact on a firms
revenue, it is well appreciated by marketers and, hence has been widely applied in
customer loyalty studies (Dawes et al., 2015; Inoue et al., 2017). For this reason, the
behavioral measure of loyalty is adopted here.
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