Retention · Empirical implementation of a random-utility approach to measure switching costs and brand loyalty, followed by analysis of how usage, service design, and firm and individual characteristics relate to switching and retention.
Measuring Switching Costs and the Determinants of Customer Retention in Internet-Enabled Businesses: A Study of the Online Brokerage Industry
Information Systems Research · 2002
Summary
Measured switching costs varied substantially (up to a factor of two). Demographics had little effect, while systems usage and quality were associated with reduced switching; product-line breadth and quality could reduce switching and attrition.
For your marketing
Possible founder application
Use it to frame a lifecycle hypothesis and define customer-level outcomes; compare its market and retention horizon with yours.
Reported result
What the study found
Measured switching costs varied substantially (up to a factor of two). Demographics had little effect, while systems usage and quality were associated with reduced switching; product-line breadth and quality could reduce switching and attrition.
Research question
What the authors investigated
How large are switching costs and brand loyalty for online service providers, and which usage, service-design, firm, and individual factors determine switching and retention?
Design
Empirical implementation of a random-utility approach to measure switching costs and brand loyalty, followed by analysis of how usage, service design, and firm and individual characteristics relate to switching and retention.
Sample and setting
The online brokerage industry; the publisher page reports data from that industry and evaluates systems usage, systems quality, product-line breadth and quality, and customer demographics.
Scope and transfer
Limitations to keep in view
Not stated on the publisher article page's abstract; the page identifies online brokerage as the empirical context, so transferability to other Internet-enabled businesses is not established there (scope caveat).
Research sources
The publisher abstract says the authors implement a random-utility approach using online-brokerage data and find up to twofold variation in switching costs, little demographic effect, and reduced switching associated with usage, systems quality, and firm product breadth/quality. Direct publisher-page retrieval was recorded on 2026-10-09; profile summarizes the accessible record and does not claim independent review of inaccessible full text.