Consumer Switching Behavior

In: Business and Management

Submitted By katextiles
Words 18359
Pages 74
CONSUMER SWITCHING BEHAVIOUR

ABSTRACT

Due to the increased competition and high costs of acquisition in the cellular

industry, it has become increasingly important for companies to focus on retaining

clients. This paper outlines the current industry conditions and studies the causes of

consumer switching behaviour, as outlined by Susan Keaveney (1995) in her study of the

service industry, and identifies additional factors specific to the cellular industry. The

focus of the study is to identify the most important factors that cause consumers to

switch. Using primary research, the author evaluates how TELUS Mobility is rated on

each of the factors against the competition, by its own clients and the competitor's

clients. Finally, the author provides recommendations to TELUS Mobility to effectively

enhance its customer retention and build long-term client relationships.

EXECUTIVE SUMMARY

Increase in demand for cellular phone service in the Canadian market has led to

new entrants into the cellular industry. However, with the major players looking at

expanding nationally, there have been a number of acquisitions. Until 2000, there were

five service providers in the industry. With the acquisition of Clearnet by TELUS

Mobility in 2000 and Microcell by Rogers AT&T earlier this year, there are only three

large players left in the industry- Rogers Cantel, Bell Mobility and TELUS Mobility.

The biggest challenge faced by the cellular industry today is the churn rate. Almost 30

percent of a company's subscribers leave per year and the cost of acquiring new

subscribers is high, $600 CAD to $700 CAD per subscriber.

This paper looks at the reasons for consumer switching behaviour and is based on

Susan Keaveney's research on service industries. Additionally, based on personal…...

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