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EMAC 2020 Annual Conference


When does competitive intensity incentivize firms to improve customer relationships? A meta-analysis
(A2020-64346)

Published: May 27, 2020

AUTHORS

Roelof Hars, University of Groningen; Hans Risselada, University of Groningen; Jaap Wieringa, University of Groningen

KEYWORDS

churn; meta-analysis; competition

ABSTRACT

A central premise in the relationship marketing and marketing orientation literatures is that competitive intensity incentivizes firms to improve customer relationships in order to prevent customer churn. We argue that especially for high competitive intensity, this proposition is not straightforward. We propose that high competitive intensity can also disincentivize firms from improving customer relationships, because competitive intensity can cause choice overload effects, which increase switching costs. This causes customers to stay regardless of how good their relationship with a firm is. In this paper, we perform a meta-analysis on 100 churn studies covering just under six million customers in a broad range of competitive settings. In doing so, we study how competitive intensity impacts the link between firms’ relational performance and customer churn. We present initial empirical results on both a main effects analysis, and on the moderating effect of competitive intensity.