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Brand defection in a business-to-business financial service

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  • Bogomolova, Svetlana
  • Romaniuk, Jenni

Abstract

This research examines the reasons for brand defection in a business-to-business financial service. Three cross-sectional studies examine customers who ceased using a brand in the previous month. The research shows that about 60% of brand defection occurs for reasons that brand managers cannot influence, such as business closure or head office decisions. Hence, retention strategies can have a maximum success rate of 40%. Furthermore, most defection within this 40% relates to dissatisfaction with fees and charges, or the attractiveness of competitors' offers. These reasons limit what brand managers can do to retain these customers other than just matching competitors' offers. On the other hand, most customers who defect because of price issues or reasons beyond management control still have a positive attitude towards their former brand and are likely to consider this brand for future purchases. Only 4% of lapsed customers defect because of service service-related issues. These customers are less positive about their former brand, compared to other lapsed customers. The research provides implications for investments in customer acquisition versus customer retention.

Suggested Citation

  • Bogomolova, Svetlana & Romaniuk, Jenni, 2009. "Brand defection in a business-to-business financial service," Journal of Business Research, Elsevier, vol. 62(3), pages 291-296, March.
    • Handle: RePEc:eee:jbrese:v:62:y:2009:i:3:p:291-296
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Amankwah-Amoah, Joseph, 2014. "Old habits die hard: A tale of two failed companies and unwanted inheritance," Journal of Business Research, Elsevier, vol. 67(9), pages 1894-1903.
    2. Robert Kozielski & Magdalena Kalinska-Kula & Michal Medowski, 2022. "New Perspective on Brand Portfolio Management," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 846-874.
    3. Shaw, Michael & Nowicki, Andrew, 2018. "Incommensurability and paradigm crossing: Folding the EGs back into the omelet or blood in the water?," Australasian marketing journal, Elsevier, vol. 26(4), pages 297-302.
    4. Riebe, Erica & Wright, Malcolm & Stern, Philip & Sharp, Byron, 2014. "How to grow a brand: Retain or acquire customers?," Journal of Business Research, Elsevier, vol. 67(5), pages 990-997.
    5. Bogomolova, Svetlana, 2016. "Determinants of ex-customer winback in financial services," Journal of Retailing and Consumer Services, Elsevier, vol. 32(C), pages 1-6.
    6. Michael Braun & David A. Schweidel, 2011. "Modeling Customer Lifetimes with Multiple Causes of Churn," Marketing Science, INFORMS, vol. 30(5), pages 881-902, September.
    7. Bogomolova, Svetlana, 2010. "Life after death? Analyzing post-defection consumer brand equity," Journal of Business Research, Elsevier, vol. 63(11), pages 1135-1141, November.
    8. Bogomolova, Svetlana & Anesbury, Zachary & Lockshin, Larry & Kapulski, Natasha & Bogomolov, Tim, 2019. "Exploring the incidence and antecedents of buying an FMCG brand and UPC for the first time," Journal of Retailing and Consumer Services, Elsevier, vol. 46(C), pages 121-129.

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