E-commerce is growing rapidly and has penetrated almost all industries. Given its enormous potential, the number of electronic stores has increased at an unprecedented rate during the last five years. Theory seems to support the prediction that online shopping will keep rising in the future, as online search engines and various intelligent agents can dramatically reduce search costs associated with purchase decisions (Alba et al., 1997; Bakos, 1997; Brondoni, 2002a, 2002b; Maggioni, 2000). However, online shopping lacks “look-and-feel” (Figueiredo, 2000) and hence evaluation of product attributes for firms online can be still difficult. Indeed, while in off-line commerce it is often the salesperson that influences the buyer’s trust in the seller (Doney & Cannon, 1997) thus inducing loyal behaviors, in the Internet context it is the Web site that should do that (Lohse & Spiller, 1998; Del Giudice & del Giudice, 2003). That’s why nowadays the assessment of the effectiveness of e-commerce Web sites is of critical importance to online retailers. As e-commerce begins to mature, the ability to retain customers is the only way an e-business can survive (Agrawal & Karahanna, 2000; Agrawal et al., 2001; Chen & Hitt, 2002). Apparently the quality of the online customer experience that effectively-designed Web sites create not only has a positive effect on the economic performance of a firm, but also possesses the potential to create a unique and sustainable competitive advantage for Internet-based sellers, by turning Web crawlers into loyal customers (Rajgopal et al., 2001). In fact, since quality service is something customers generally expect vendors to provide (Parasuraman et al., 1985; Zeithaml et al., 1996), high quality service through interface design and Web site usability should arguably build customer loyalty, as a recent study with customers of online vendors indicates (Reichheld & Schefter, 2000). Overall, Web sites’ design elements influence perceptions of Web site complexity, and perceived complexity, in turn, has a direct influence on communication efficiency and effectiveness and, thus, on purchase intentions.
Following those premises, this chapter focuses on how Web site elements (interface design, tools provided, usability, information, etc.) can influence customer satisfaction and prevent switching behaviors, acting as positive switching costs. Jones et al. (2000) mention that some switching barriers can be seen as more positive in their nature and others as more negative. Psychologically, it should make a great difference whether one maintains a relationship because of a perception that the supplier is superior in services and products (a positive reason), or because it is too expensive to leave the supplier, there is a monopoly on the market or the supplier is powerful (negative reasons). The main rationale behind the distinction between positive and negative reasons is similar to Lund’s idea of barrier push vs. positive pull (Lund, 1985); a supplier that retains its customers through positive pull rather than through barrier push is likely to develop a stronger position vis-à-vis its customers. Only a few empirical studies, however, investigate how various kinds of switching costs affect satisfaction with suppliers, repurchase intentions, cognitive loyalty and the relationships between these variables (Jones et al., 2000). The purpose of this chapter is to make some distinctions as to the character of switching barriers, and to formulate and empirically test hypotheses regarding the role of positive switching costs stemming from Web sites’ elements in the context of satisfaction, repurchase intentions and cognitive loyalty. Particularly, a dynamic framework of cognitive lock-in is then discussed. The aim of this chapter, therefore, is to highlight the strategic role that customer switching costs play both in traditional sectors and in the expanding networked environment, to expand and improve upon the conceptualization of the force, and to develop a customer switching cost framework in an effort to improve understanding and management of this phenomenon. The chapter is organized as follows. In the first part of this work we focus on the literature review (the strategic importance of customer switching costs by analyzing their role in the strategy, economics, and marketing literature). Next we explore why switching costs are even more strategic in today’s digital environment. We discuss, then, and expand upon the concept of customer switching costs in an effort to provide a more complete and useful conceptualization. Next we discuss the key issues and challenges involved in managing switching costs and we attempt to develop a switching cost framework to help improve understanding and management of these challenges. Finally, we discuss key implications of the work and offer our conclusions.