The Relationship between Service Quality, Economic and Switching Costs in Retail Banking

The objective of this study is to examine the structural relationships between service quality, economic and switching costs, loyalty and word-of-mouth intentions. For this aim, we proposed a conceptual model based on literature review and proposed hypothesis according to this model. In order to test the hypothesis structural equation modeling technique were applied to the data. Data were collected from 397 retail banking customers during May 2012 in Sakarya/Turkey. The results of this empirical study reveal that service quality has positive effect on economic and switching costs and these costs have positive effect on both loyalty and word-of-mouth intentions. The results also indicate negative relationship between economic costs and switching costs and behavioral intentions. In addition, positive relationship was found between service quality, loyalty and word-of-mouth intentions. At the end of this study some managerial implications are discussed based on the findings.