Publication Details

This paper was originally published as: Yanamandram, V & White, L, Why Do Dissatisfied Customers in the Business-to-Business Services Sector Stay With Their Existing Service Providers? An Exploratory Study, Australia and New Zealand Marketing Academy Conference (ANZMAC 2004), Victoria University of Wellington, New Zealand, 29 November-1 December 2004.


There have been few studies that investigate the reasons that dissatisfied customers stay with service organisations. Further, there have been no studies that have investigated a range of factors simultaneously in a single model in the business services sector. This paper attempts to address this research gap. A qualitative study was conducted, with 17 personal interviews undertaken with managers who are involved in the choice of service providers. The results not only confirmed factors in the literature: switching costs, impact of alternative service providers, investment in relationships, service recovery and inertia, but also uncovered seven other factors: the service provider offers sales leads, lower price, legal issues, delivers good quality core product, favouritism, impact on other business units and need to keep the existing service provider as a back-up option. Contrary to the literature on buyer-seller relationships in business markets that state that relationships are of utmost importance, this category was not considered as important by customers as a reason not to switch. Switching costs and quality of alternatives were much more important. Implications of the findings are discussed.