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Through this study, wehope tofill the gap caused by the lack of attention given to customers’ perceptions indetermining service value and switching barriers and to the role of personal va

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The Service Industries Journal

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Service value and switching barriers: a personal values perspective

Pham Ngoc Thuy, Le Nguyen Hau & Felicitas Evangelista

To cite this article: Pham Ngoc Thuy, Le Nguyen Hau & Felicitas Evangelista (2016): Service

value and switching barriers: a personal values perspective, The Service Industries Journal,DOI: 10.1080/02642069.2016.1158252

To link to this article: http://dx.doi.org/10.1080/02642069.2016.1158252

Published online: 21 Mar 2016.

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Service value and switching barriers: a personal values

This research aims to investigate how customers, the key actors in a

service relationship, perceive service value and switching barriers.

The study is framed along the means-end-chain theory of personal

values and theory of customer resources in the service-dominant

logic Hypotheses about the impact of personal values on customer

value, switching barriers and customer loyalty were tested using

structural equation modeling of survey data obtained from the

health care and retail banking sectors in Vietnam The results show

that in both sectors, personal values have a signi ficant impact on

perceived process and outcome value as well as on perceived

economic and relational switching barriers Economic barriers were

found to affect loyalty in the banking sector, in the same way that

relational barriers affect loyalty in the health-care sector only.

Loyalty in both sectors is in fluenced by process but not by

outcome value The implications of these findings are discussed.

ARTICLE HISTORY

Received 29 July 2014 Accepted 10 September 2015

KEYWORDS

Personal values; service value; switching barriers; customer loyalty; service- dominant logic

Introduction

Customer loyalty toward a service has been a popular research topic amongst marketingacademics and practitioners alike A review of the extant literature shows that servicefirmscan achieve customer loyalty by improving the value of their offering and the quality oftheir relationship with the customer (Athanasopoulou, 2009; Chahal & Kumari, 2011;Koller, Floh, & Zauner,2011; Wang,2010; Zhang, Doorn, & Leeflang,2014), as well as bycreating switching barriers (Barroso & Picón, 2012; Burnham, Frels, & Mahajan, 2003;Jones, Mothersbaugh, & Beatty, 2000, 2002; Woisetschläger, Lentz, & Evanschitzky,

2011) Value creation is the reason for a firm’s existence (Slater, 1997), and a firm’ssuccess is dependent on how well it delivers what is of value to its customers (Payne &Holt, 2001) Delivering what firms consider to be of value to its customers, which hasbeen the common theme of many previous studies (e.g Parasuraman, Zeithaml, &Berry, 1988; Rust & Oliver,1994; Sweeney & Soutar, 2001; Walsh, Shiu, & Hassan, 2014;Williams & Soutar,2009), however, is not enough Firms need to ensure that customersperceive their offering as something of value, otherwise value is not created(Martelo-Landroguez, Barosso-Castro, & Cepeda-Carrión, 2013) Likewise, switching bar-riers need to be seen from the customer’s point of view (Pick & Eisend,2014)

CONTACT Felicitas Evangelista f.evangelista@uws.edu.au School of Business, Western Sydney University, Sydney, Australia

http://dx.doi.org/10.1080/02642069.2016.1158252

The emerging service-dominant logic (Vargo & Lusch,2004), or service-logic (Grönroos,

2008), advocates that the customer is the co-creator or even the key creator of value in aservice process, and thefirm serves only as a value facilitator in the customer’s need-satis-fying process (Grönroos & Ravald,2011; Grönroos & Voima,2012) In this view, the custo-mer is neither just a passive receiver of value, nor a passive respondent to the switchingbarriers created by thefirm Instead, the customer is the focal actor (Grönroos & Voima,

2012; Marterlo-Landroguez et al.,2013) The need to investigate how customers perceiveservice value and switching barriers, from their own frame of reference and in their ownusage context, and how these impact customer loyalty is, therefore, of much importancefor theory development and industry practice

It has long been accepted that an individual’s value system has a major influence onconsumer behavior (Vernon & Allport,1931; Parsons & Shils,1951; Rokeach, 1973), andmore recent studies have shown that personal values do serve as blueprints for percep-tions (Ladhari, Pons, Bressolles, & Zins,2011; Ledden, Kalafatis, & Samouel,2007; Shaw,Grehan, Shiu, Hassan, & Thomson, 2005) Despite its pervasive role, there have onlybeen a few studies about personal values in thefield of services (e.g Durvasula, Lysonski,

& Madhavi, 2011; Ledden et al., 2007; Marandi, Little, & Sekhon, 2006; Raajpoot, 2004;Sousa & Coelho, 2011) Therefore, this study was undertaken with the aforementionedresearch gaps and theories in mind Specifically, our aims are two-pronged First, webuild on the means-end theory (Gutman, 1982; Zeithaml, 1988) and the concept ofservice personal values (Lages & Fernandes, 2005) to develop a theoretical frameworkthat establishes the links among service personal values, switching barriers, perceivedservice value and customer loyalty Second, we test the relevance and applicability ofthis framework on membership-based (retail banking) and transaction-based (healthcare) services in an emerging market, Vietnam The difference between these two types

of services in Vietnam is that, in the former, customers have continuous regular contactwith the service provider that is governed by some form of contractual agreement,whereas, in the latter, the service tends to be discrete With banks, customers apply tojoin the ‘club,’ and once a member, a natural relationship with the service providerensues In contrast, health-care providers need to undertake a proactive effort to movebeyond a transactional perspective in order to create an ongoing relationship (Lovelock,Patterson, & Wirtz,2011) It is in the context of these differences that switching barriers,service value and customer loyalty are examined in this paper Through this study, wehope tofill the gap caused by the lack of attention given to customers’ perceptions indetermining service value and switching barriers and to the role of personal values inunderstanding customer perception and loyalty In addition, because this study wasundertaken in an emerging market that is underrepresented in the literature, we hopethat the results will be useful to other researchers and practitioners in thefield

Literature review

Personal values and consumer behavior

Personal values refer to an individual’s ‘enduring belief that a specific mode of behavior orend state of existence is personally or socially preferable to an opposite or converse mode

of conduct or end-state of existence’ (Rokeach, 1973, p 5) They are the standards that

form the basis of beliefs, attitudes and behaviors They serve as the‘guiding principles inpeople’s lives’ (Schwartz,1994, p 88) They provide the basis by which people judge what

is good or bad, what is important or unimportant Several methods for measuring personalvalues exist in the literature The more commonly cited ones are the Rokeach Value Scale(Rokeach,1973), the List of universal human values (Schwartz & Bilsky,1990), List of Values(Kahle,1983) and Values and lifestyles (Mitchell,1983)

Vinson, Scott, and Lamont (1977), Gutman (1982) and Zeithaml (1988) were among theearly scholars who established the connection between personal values and consumerbehavior Vinson et al (1977) advocate that personal values are responsible for the selec-tion and maintenance of the ends or goals toward which human beings strive and regulatethe methods in which this striving takes place They propose a hierarchical link, startingfrom global personal values (the highest abstract level), to domain-specific values, and,finally, to the specific product attributes (the lowest abstract level) In the same vein,Zeithaml (1988) suggests that the process of evaluating a product or service involves afour-level means-end chain approach (Gutman,1982; Olson & Reynolds,1983; Young &Feigin,1975) At the lowest level, the consumer’s focus is on the service characteristics,concrete service attributes or functional benefits At the second level, the attention is

on the quality of the service relative to one’s expectations of it The third level relates tothe consumer’s assessment of the benefits and costs of the product or service, that is,product/service value At the fourth and highest level, the consumer evaluates theextent to which the product/service reflects or matches the consumer’s personal values

As such, product or service offerings that are congruent with a consumer’s personalvalues are adopted, while those that are not are rejected In this sense, consumersachieve their personal values through the products or services they acquire or consume(Kahle,1983), and thus, personal values become a powerful mechanism for understandingand reaching consumers (Durgee, O’Connor, & Veryzer,1996) Personal values have beenfound to affect innovative behavior, store choice, attitudes toward e-shopping, prefer-ences for products and brands, acceptance of web-marketing facilities, mall shopping atti-tude and behavior, internet use and specific shopping motives (Ladhari et al.,2011)

Service personal values

Applying the general concept of personal values to thefield of services, Lages and nandes (2005) developed the concept of service personal values, which is defined as ‘acustomer’s overall assessment of the use of a service, based on the perception of what

Fer-is achieved in terms of hFer-is own personal values’ (p 1564) Service personal valuesconsist of three dimensions, namely, service value to peaceful life, service value tosocial recognition and service value to social integration (Lages & Fernandes, 2005).Service value to a peaceful life refers to the extent to which a particular service is perceived

to contribute to a pleasurable life, one that is safe and tranquil for its users This dimension

reflects a combination of values emanating from Rokeach’s (1973) scale that is used toassess general values at the individual level On the other hand, value to social recognitionrefers to the perceived ability of a particular service provider to contribute toward thegaining of self-respect, social recognition and status Finally, value to social integrationfocuses on the perceived ability of a service provider to help strengthen friendship andpromote better relationships Based on the studies of Kahle (1983) and Rokeach (1973),

the latter two dimensions are said to operate at the social-oriented level All three sions are terminal rather than instrumental, and as such, they tend to be more stable andpermanent (Pitts, Wong, & Whalen,1991) In services research, personal values have beenfound to influence service selection criteria (Allen, Ng, & Wilson, 2002), service qualityexpectations (Raajpoot,2004), service value (Ledden et al.,2007) and evaluation of servicesbefore and after the buying decision is made (Koo, Kim, & Lee,2008).

dimen-Proposed model and hypotheses

Service personal values and switching barriers

Switching barriers refer to factors that make it difficult or costly for customers to defect toother service providers (Jones et al.,2002) They are not only economic in nature, they alsohave psychological and emotional dimensions (Burnham et al., 2003) When customersbreak away from their existing service provider, they not only spend money, time andeffort to search for an alternative provider but can also suffer from emotional discomfort

or psychological stress from the break-up

In general, switching costs or switching barriers may be categorized into three groups:affective losses, benefit losses and sunk costs (Burnham et al.,2003) Sunk costs includecosts associated with breaking the existing relationship and costs necessary to set up anew relationship These sunk costs are non-recoupable (Patterson & Smith,2003) In thisstudy, for parsimonious reasons, we follow Woisetschläger et al (2011) by combiningbenefit losses, sunk costs and set-up costs into one construct called economic barrier.The other component is termed relational barrier (or social barrier), reflecting the affectivecosts associated with personal and brand relationship losses (Woisetschläger et al.,2011).Considering that these components are conceptually different, the effect of service per-sonal values on each component is examined separately in this study

The justification for the relationship between a customer’s service personal values andhis or her assessment of a service provider’s switching barriers is through how he or sheemploys service personal values to assess the benefits of staying with the current providerand/or the losses associated with joining a new provider By staying with an existing pro-vider, a customer could receive benefits such as special treatments or privileges for being aloyal customer, comfort and time saving due to familiarity with transactional procedures,and established social aspects such as personalization, supportiveness and positive inter-personal interactions with frontline staff and with other customers of the same brand(Jones & Reynolds,2007) The extent of these perceived benefits would depend on thecustomer’s perception of how they correspond to his or her service personal values(Vinson et al., 1977; Zeithaml, 1988) The benefits of staying would be thought of ashigh if these are perceived to contribute toward achieving a peaceful life, social recog-nition or social integration In contrast, the benefits would be thought of as low if theseare perceived as irrelevant or not contributing toward enjoying any of the three servicepersonal values

Switching is not only about ignoring the benefits associated with the current providerbut also about anticipating the potential losses of joining a new one These losses may be

in terms of time and effort spent on searching for and learning about a new provider’sservice offerings and service delivery procedures, worries about risk associated with lack

of knowledge or experience about the new provider, or tensions when dealing with thenew provider’s personnel or staff (Jones & Reynolds,2007; Burnham et al.,2003) The cus-tomer may feel his or her personal life to be less peaceful in this situation The personalvalues of being socially integrated or recognized by the service staff or the brand commu-nity may also be weakened significantly (Vinson et al.,1977; Zeithaml,1988) The severity

of switching barriers would, therefore, depend on how much of a threat to one’s internalpeaceful life, social recognition or social integration a change in service providers is per-ceived by the customer The benefits associated with staying with the current providerand the potential losses associated with joining a new provider may be relational or econ-omic in nature (Burnham et al.,2003; Woisetschläger et al.,2011) If the relational and/oreconomic benefits of switching are perceived to allow the customer to enjoy a peacefullife, social recognition or social integration, then the service’s relational barriers would

be perceived as high On this basis, the following hypotheses are proposed

H1: Customers who perceive that staying with a particular service provider would allow them to achieve (a) a peaceful life, (b) social recognition, or (c) social integration would perceive the econ- omic switching barriers to be high.

H2: Customers who perceive that staying with a particular service provider would allow them to achieve (a) a peaceful life, (b) social recognition, or (c) social integration would perceive the rela- tional switching barriers to be high.

Service personal values and perceived service value

The service-dominant logic paradigm views services as activities that create value (Vargo &Lusch, 2004) According to this paradigm, both the service provider and customer areco-creators of value In a given context, consumers use, combine or integrate their ownoperand and operant resources to convert the offerings of marketers or providers inorder to create value or the perception of value for themselves The value generated bythe consumers would be in the form of benefits such as economy, quality, convenience,experience or fulfillment of one’s values These benefits or value is what consumers get

in return for the resources they give as a service takes place (Babin & James,2010).The benefits or ‘gets’ that consumers obtain from a service may be categorized intooutcome and process value Outcome value includes those benefits that result from theservice encounter, whereas process value refers to the benefits obtained or experiencedduring the co-creation process This bi-dimensionality of perceived value is based onthe idea that a service has two components, namely, technical (i.e outcome) and func-tional (i.e process) (Grönroos’s, 1982) This categorization is consistent with the viewthat value for the user or value-in-use is created or emerges during usage, and value isnot determined only at the end of the process (Grönroos & Voima, 2012; Parasuraman,Zeithaml, & Berry,1985)

The justification for the relationship between a customer’s service personal values andhis/her perception of the service value is through how he or she employs service personalvalues to assess the service benefits or the ‘gets’ in the get-give conceptualization ofservice value (Zeithaml,1988) When assessing the service offering of a particular provider,the customer’s perception of its attributes and the benefits would depend on how wellthese attributes correspond to or are congruent with the customer’s service personal

values (Rokeach,1973; Zeithaml,1988) The benefits would be thought of as high if theservice’s attributes would enable him or her to achieve a peaceful life, social recognition

or social integration and low if otherwise

Any particular service offering can have two types of attributes, namely, functional orprocess and technical or outcome (Grönroos,2008) If the process attributes of a serviceare perceived to enable the customer to achieve a peaceful life, social recognition orsocial integration, the service would be rated as high in terms of process benefits orprocess value

For example, in a health-care center, clients or patients would perceive a high-processvalue when they receive friendly and caring attention from the medical staff Such actionswould make the patient feel comfortable or less worried (i.e value to a peaceful life) Inbanking, clients would perceive a high-process value when the frontline staff at abranch office greets them by their first name because this makes them feel important

or socially accepted (i.e value to social recognition) Similarly, if the outcome attributes

of a service are perceived to allow the customer to achieve some or all of the three ponents of service personal values, the service created by a specific provider would berated high in terms of outcome value In a medical center, outcome attributes couldcome in the form of patients feeling better, having less pain or feeling more confidentabout their health, and feeling more secured or tranquil (i.e value to peaceful life) Inbanking, outcome attributes could be in the form of personalizedfinancial advice or pro-viding VIP privilege status (value to social recognition) Thus, the effects of service personalvalues on perceived service value are hypothesized, as follows:

com-H3: Customers who perceive that a particular service would allow them to achieve (a) a peaceful life, (b) social recognition, or (c) social integration would perceive the outcome value of that service to be high.

H4: Customers who perceive that a particular service would allow them to achieve (a) a peaceful life, (b) social recognition, or (c) social integration would perceive the process value of that service

to be high.

Switching barriers and customer loyalty

Loyalty is conceptualized as consisting of repeated purchases or continued patronage due

to a strong internal disposition (Aksoy,2013; Day, 1969; Han, Kwortnik, & Wang, 2008).Neither repeat purchases nor continued patronage alone constitute loyalty In order forloyalty to exist, the act of re-buying from, staying with or not leaving a service providerhas to be guided by a deeply held commitment to or a strong favorable attitudetoward the focal service provider and the idea that this patronage pattern occursdespite situational influences and marketing efforts designed to cause otherwise (Oliver,

1999) In this context, loyalty also manifests in other ways, such as by expressing a ence for a service provider over others, saying positive things about the company to othersand recommending the company to others (Zeithaml, Berry, & Parasuraman,1996) Suchactions and behavioral intentions are distinguished from spurious loyalty in that spurious-ness is driven by situational exigencies rather than by a strong internal disposition (Dick &Basu,1994)

prefer-Both economic and relational switching costs are important antecedents of customerloyalty Studies have shown that personal relationships with service providers have a

positive effect on customer loyalty, and the same is true for economic barriers (Balabanis,Reynolds, & Simintiras,2006; Burnham et al.,2003) The investment into a relationship isone reason why consumers stay with their service provider The benefits they obtainfrom the relationship, which Gwinner, Gremler, and Bitner (1998) identify as confidence,social status and special treatment, could keep them loyal even if they perceive thecore service attributes as suboptimal These benefits could increase customers’ dependen-cies and increase switching costs simultaneously.

On the other hand, customers are motivated to remain loyal to a service provider inorder to minimize the use of their resources, such as the cost of searching for an alternativeprovider, the cost of breaking a contract, cost of joining with an alternative provider andprocedural costs such as completing new forms and other associated transactional requi-sites Studies (e.g Gronhaug & Gilly,1991; Ping,1993) have shown that customers tend toremain loyal even if they are dissatisfied or despite fluctuations in the quality of servicereceived when the costs of leaving the current provider and joining a new one are per-ceived to be high The effect of switching costs on customer retention has been found

by Burnham et al (2003) to be far stronger than satisfaction, even in industries whereswitching costs are low or in which switching is relatively easy Based on these argumentsandfindings, the following replications are proposed:

R1: Economic barriers have a positive effect on customer loyalty.

R2: Relational barriers have a positive effect on customer loyalty.

Perceived service value and customer loyalty

The value a consumer derives from a service plays a significant role in determining theirloyalty to the service provider Consumers that benefit from their exchanges with aservice provider are more likely to have a sustainable long-term relationship with thecompany They tend to remain loyal if they understand well or clearly recognize thevalue of staying in the relationship (Gwinner et al.,1998) From a service-dominant logicperspective, it can be argued that customers will become patrons and will remain to be

so when they use the service offered by marketers to create value-in-use, provided theobjective value or the subjective perception of the service persists (Babin & James,

2010) On the other hand, if customers are unable to create the desired value out of aservice activity, it is more likely than not that they will stop buying the service (Grönroos

& Ravald,2011) While the value of a service as mentioned earlier can be categorized intooutcome and process value, service value can also be cognitive or emotional Aside fromcognitive value, service encounters can also lead to emotional value In a study of businesstravelers, the quality of the interpersonal relationships that existed between a traveler andtravel agent was found to have a direct positive link with loyalty (Macintosh,2007) Cus-tomers who experience positive emotions after a service encounter will want to revisitthe providers that have been the source of the positive emotions Conversely, when aservice encounter produces negative emotions, loyalty is adversely affected (Sierra &McQuitty,2005)

The direct link between customer value and loyalty has seldom been tested as tion has often been reported to mediate the relationship between these two variables(Chahal & Kumari, 2011) Investigating this direct relationship is, however, important

because customer value is the ‘fundamental basis for all marketing activity’ (Holbrook,

1994, p 22), and as such, it is a superordinate goal that regulates loyalty (Sirdeshmukh,Singh, & Sabol, 2002) The customer value creation paradigm is also newer and morewidely adopted (Ruiz, Gremler, Washburn, & Carrión,2008), advocating for a much morecomprehensive approach than a simple focus on service quality or customer satisfaction(Vargo & Lusch, 2004; Woodruff, 1997) From a practical point of view, examining thedirect effects of value on loyalty has valuable implications for value-based segmentation,communications and service development strategies (Floh, Zauner, Koller, & Rusch,2014)

On this basis, the following replications are formed:

R3: Outcome value has a positive effect on loyalty.

R4: Process value has a positive effect on loyalty.

The direct effect of service personal values on customer loyalty

When consumers decide to acquire or adopt a particular service, they perceive the service

to be self-relevant and capable of fulfilling or enhancing some important personal values(Walker & Olson, 1991) The link between loyalty and personal values can be furtherexplained in terms of the association between an activated attitude (e.g loyalty) andsome aspect of self-concept (e.g values), which Johnson and Eagly (1989) refer to as‘invol-vement.’ Where attitudes are ‘embedded in the enduring values of the self-structure,’value-relevant involvement would be difficult to change Extending this line of reasoning

to loyalty, if repeated patronage of a service is due to important self-related ends such as apeaceful life, social recognition or social integration (i.e service personal values), then thisbehavior would be resistant to change (Celsi & Olson,1988) Similarly, customers whofindthat all three components of their service personal values are congruent with those of theirservice provider will remain loyal Value congruence has been found to have a positiveeffect on affective commitment (MacMillan, Money, Money, & Downing,2005; Morgan &Hunt, 1994) and repurchase intentions (Jones & Reynolds, 2007; Ping, 1993) Throughvalue congruence, customers can develop customer-company or organizational identifi-cation According to social identity theory, organizational identification is similar tosharing the same self-definitional attributes with a company or a brand (Lam, Ahearne,

Hu, & Schillewaert, 2010), which, in the context of the present study, is similar tosharing the same personal values with one’s service provider

The attitude of a consumer toward a brand or a service provider is said to be related tohis or her service personal values (i.e peaceful life, social recognition and social inte-gration), and the stronger this relationship is, the more central that attitude becomes(Dick & Basu,1994) Central attitudes are intimately felt and cherished by an individual.They tend to be stable over time and are strongly associated with knowledge structures

in memory and behaviors such as loyalty Unlike less important attitudes, central attitudesare resistant to counter-persuasion, which means that the more central an attitude istoward a brand, the greater is the loyalty of the individual to that brand (Dick & Basu,

1994) Considering that personal values are the underlying determinant of central tudes, the following hypothesis is proposed:

atti-H5: Customers who perceive that a particular service would allow them to achieve (a) a peaceful life, (b) social recognition, or (c) social integration would be loyal to that service.

The impact of service personal values on perceived switching barriers and perceivedservice value and its consequent effects on loyalty are summarized inFigure 1 Service per-sonal values are conceptualized as a second-order formative construct consisting ofservice value to (a) peaceful life, (b) social recognition and (c) social integration Servicepersonal values are hypothesized to have a positive impact on the two components ofswitching barriers, namely, economic and relational (H1a,b,c and H2a,b,c) It is also hypoth-esized to be an antecedent of perceived service value, that is, outcome and process value(H3a,b,c and H4a,b,c) The components of switching barriers and perceived service valueare then proposed to have a positive effect on customer loyalty (R1 to R4) Finally, servicepersonal values are deemed to have a positive direct effect on loyalty (H5a,b,c).

Method

The empirical data for this hypothetico-deductive research were collected from customers

of two service industries, retail banking and health care As mentioned earlier, the choice ofthese industries was guided by the nature of the contractual relationship between thefirmsand their customers While retail banking is membership-based, health care is a transaction-based service (Lovelock et al.,2011) The context of the study is Vietnam, a non-western,emerging market that is also transitioning from a central planning economy to a form ofmarket socialism These features make Vietnam a particularly appropriate setting for thisstudy because of the expanding role of emerging markets in the global economy Thedata for this study were collected by personal interviews using a structured questionnaire.The potential respondents were existing customers of banks and health-care centers Theywere approached at different service points, that is, banks, hospitals and clinics, by nine uni-versity students who were then enrolled in a research methods course The use of conven-ience sampling in this study was the only option as it was not possible to obtain or develop alist of bank or health-care center customers in order to draw a simple random sample Con-venience sampling is further justified by the fact that the sample is relevant as it is within thetheory’s domain and the goal of this study is to test a theoretical model (Calder, Phillips, &Tybout,1981) The questionnaire was initially developed in English and later translated into

Figure 1.Different paths from service personal values to customer loyalty

Vietnamese through a translation and back-translation procedure The two translators wereuniversity academics who arefluent in both languages After comparing the two Englishversions, mismatched points were discussed, and the Vietnamese version was revisedaccordingly Pretests were undertaken by interviewing four customers in each industry,which led to some adjustments in item wordings The measurement scale for service per-sonal values consisted of 12 items reflecting three dimensions, which were adapted fromLages and Fernandes (2005) The scales for process value and outcome value had fouritems and were adapted from Wang, Lo, Chi, and Yang (2004) and Sweeney and Soutar(2001) Switching barriers (economic and relational) were measured by a 6-item scalederived from Burnham et al (2003), and customer loyalty was measured by a 4-itemscale based on Zeithaml et al (1996) and Han et al (2008).

Results

Sample characteristics

The overall sample consisted of 761 respondents, 48% of whom were customers of retailbanking and 52% of health-care services The overall sample and the individual sub-samples were fairly balanced in terms of gender (52% female vs 48% male) andincome level The age groups were slightly skewed In the overall sample, 57.6% of therespondents fell within the 18–35 year age group, whereas only 42.4% were over 35years The sub-samples of each sector had comparable age distributions

Assessment and refinement of measurement scales

Exploratory factor analyses (EFA) were initially undertaken on each sub-sample and theoverall sample to assess and refine the measurement scales The EFA estimation on theoverall sample yielded satisfactory indices: KMO = 0.920, Barlett’s test of sphericity

p = 000, total extracted variance = 72.82% and the smallest eigenvalue = 1.133 tory indices were also obtained from each sub-sample However, the results led to the del-etion of three items due to low factor loadings (i.e less than 0.45) The remaining 27 itemswere then subjected to confirmatory factor analysis (CFA) using AMOS software

Satisfac-The full measurement model included eightfirst-order constructs and their respective

reflective items The test for normality of variables showed that the kurtosis (−0.889 to+0.394) and skewness (−0.588 to +0.103) were within acceptable limits (Kline,2011)

In this situation in which the variables are slightly deviated from normality, the use ofmaximum likelihood estimation is considered appropriate, as the parameter estimateswould exhibit minimal bias compared to other methods (Bollen,1989; Hair, Black, Babin,

& Anderson,2010; Olsson, Foss, Troy, & Howell,2000) In addition, maximum likelihoodalso allows for the estimation of fit indices, significance testing of factor loadings andfactor correlations, as well as the estimation of confidence intervals (Fabrigar, Wegener,MacCallum, & Strahan,1999)

The measurement model was further refined by eliminating six items that exhibited ahigh covariance of the error terms (seeTable 1) Finally, CFA of the measurement modelconsisting of 21 items was undertaken on each sub-sample and the overall sample Thefollowing are the indices for the overall sample: Chi-square = 400.67; dF = 161; p = 000;