Customer retention: Exploring the effects of relationship layers and perceived indifference

Abstract

Informed by the social orientation of loyalty, the study extends the current body of knowledge by integrating multiple relationship layers (i.e., personal loyalty, relationship with online consumption communities and local network effects) as antecedents of various states of firm-customer interactions including habitual loyalty, fanaticism, and retaliation. Data collection was carried out in the mobile telecommunications market using a paper-based survey. A total of 600 completed survey responses were collected. The respondents were 18 or older and had been mobile service users for at least 1 year. Overall, it was found that personal loyalty, relationship with online consumption communities and local network effects were significant antecedents of fanaticism. Personal loyalty and local network effects can reinforce habitual loyalty whereas the relationship with online consumption communities can increase retaliation. The role of relationship with online consumption communities becomes more significant as customers perceive a higher level of indifference among service providers. Further, local network effects were significantly and negatively related to retaliation. The findings of this study provide important theoretical and practical implications for academics and practitioners alike, especially in the contractual, network industries.