Employees’ service responsiveness and customer trust as determinants of relational switching costs for retail bank customers in Kuwait

Abstract EN

Purpose : a research framework for the effect of employees' service responsiveness on relational switching costs for retail bank customers in Kuwait is developed and investigated considering different moderating variables (cherry-picking, customer lifetime, and household income) and customer trust as a mediator.

Study design / methodology / approach : data from a self-administered online survey were collected to conduct the research analyses.

The proposed research model was validated via two-stage structural equation modeling in AMOS statistical software.

Path analysis was performed to test the mediating effect of customer trust, and invariance tests were used to compare the proposed paths across different levels of moderating variables.

Sample and data : using a snowball sampling procedure, a convenience sample of 986 retail bank customers in Kuwait was used to test the research hypotheses.

Results : path analysis confirmed a non-significant direct effect of employees' service responsiveness on relational switching costs but a significant indirect effect through customer trust as a mediator.

Most interestingly, the direct effect was significant only for customers who were cherry-pickers and had long customer lifetimes.

Furthermore, the indirect effect was statistically significant across levels of customer lifetime only, suggesting a moderated mediation relationship.

Originality / value : research exploring the effect of employees' service responsive ness on relational factors such as trust and switching costs in retail banking is scarce, especially in collectivist cultures like that of Kuwait.

The results confirm that employees' service responsiveness is a critical aspect of the Kuwaiti bank experience because of its relational influence on the customer-bank relationship.

Research limitations / implications : in addition to the importance of the service experience for Kuwaiti banks' survival and success, employees' service responsiveness emerges as an intriguing factor influencing relational switching costs for retail bank customers based on their cherry-picking and customer lifetime levels.

To retain customers, bank strategists should pursue strategies that create relational burdens for different customer segments according to their expectations.

Keywords : responsiveness, service quality, trust, relational switching cost, and retail banking.