A factor that motivates a mobile subscriber to switch his or her carrier. Switching incentives can incite even those customers who are satisfied with their current carriers to switch to a new carrier.
Published in Chapter:
When Customer Satisfaction Isn't Good Enough: The Role of Switching Incentives and Barriers Affecting Customer Behavior in Korean Mobile Communications Services
Moon-Koo Kim (Electronics and Telecommunications Research Institute, Korea), Myeong-Cheol Park (Information and Communications University, Korea), and Jong-Hyun Park (Electronics and Telecommunications Research Institute, Korea)
Copyright: © 2009
|Pages: 13
DOI: 10.4018/978-1-60566-194-0.ch022
Abstract
In communications services, the continued competitiveness and growth of a company depends vitally on customer value. In Korea’s maturing mobile market currently also going through a period of transition, an intense competition is under way among carriers. As the market nears the point of saturation, carriers are focusing on winning over competitors’ subscribers, at the same time on retaining their existing customers. Understanding the factors that influence customers’ switching behavior, therefore, is crucial for Korean mobile carriers’ quest for successful customer strategies. Customer satisfaction is the widely acknowledged primary determinant of customer behavior. Even so, there are cases in which satisfied customers do not behave according to expectations. Some satisfied customers switch their suppliers, while others stay with their existing suppliers, even if they are dissatisfied with them. In sum, customer satisfaction does not appear to be the sole and the only determinant of customer behavior. This study is an attempt to explain the relationship between customer satisfaction and customer behavior using switching incentives and switching barriers. The role of switching incentives (subsidies toward handset replacement, attractiveness of alternative carriers, etc.) and switching barriers (burden of having to change numbers, burden of losing benefits provided by the current carrier) is investigated empirically using the results of a consumer survey.