Uncovering the real effect of switching costs on the satisfaction‐loyalty association

Purpose This paper seeks to demonstrate that assuming an increase in satisfaction will always lead to greater loyalty oversimplifies the complex association between these constructs. A more accurate view of the satisfaction‐loyalty relationship is gained by examining the moderating effect of involvement, switching costs, and relationship benefits. Design/methodology/approach This paper reports the results of a hierarchal‐moderated regression analysis on data gathered from a national mail survey of 509 customers across nine service types. Findings The findings of this study suggest that the satisfaction‐loyalty relationship is not as simple as it seems. Specifically, the negative effect that switching costs have on the association between satisfaction and loyalty declines as customer involvement with the service relationship grows, but increases as the customer perceives greater relationship benefit. These findings suggest that simply enhancing satisfaction will not always generate greater customer loyalty. Research limitations/implications Future research should consider the effects of other moderating variables, such as relationship investment and quality, on the satisfaction‐loyalty link. Practical implications This paper provides managers with insight as to how to best increase customer loyalty. Originality/value This paper is the first to simultaneously examine the moderating effect of customer involvement, switching costs, and social benefits on the satisfaction‐loyalty association.