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EMAC 2020 Regional Conference


Tactical Churn in Contractual Service Relationships: When Customers Break up Without Leaving
(R2020-83373)

Published: September 16, 2020

AUTHORS

Mona Hagebölling, Technische Universität Braunschweig; Barbara Seegebarth, Technische Universität Braunschweig; David Woisetschläger, Technische Universität Braunschweig

KEYWORDS

customer loyalty; fairness; contractual services

ABSTRACT

Targeting policy of service providers leads some customer groups like new customers receiving better contractual conditions compared to existing customers. Existing customers perceive this but do not receive any benefits for their loyalty. They react with a ‘tactical churn’ in order to obtain better offers from their current provider without any intention to switch. This study investigates the phenomenon of ‘tactical churn’ by taking into account four different sources of price comparisons: new customers, customers at the same provider, competitor offers, and intertemporal comparisons. The effects of these price comparisons are tested in a field study of 1,069 consumers. The results show price comparisons are the strongest predictor for per-ceived price fairness. Also, they have a significant negative influence on appreciation, moral obligation and a positive on subjective norms, which in turn drive ‘tactical churn’ intention.