An exploratory investigation into the propensity to choose a service provider in a converging B2b market

In business today, traditional boundaries between industries are converging as existing companies enter new markets, and as existing markets merge, such as are happening with gas and electricity utilities. This changing paradigm means that keeping existing customers and gaining new customers becomes an extra challenge. Realising that loyalty is correlated with the high profitability of the supply organisation (Henry, 2000), businesses need to understand the extent to which customers are sticky or loyal to their supplier. Keaveney (1995, p. 80) found that some customers switched services even when they were satisfied with former providers because of ‘convenience, competitive actions, or prices’. This paper will provide an exploratory investigation into the propensity to choose a service provider in a converging B2B market, by proposing a model to explain this concept. This paper suggests that service providers need to realise that loyalty is not necessarily an antecedent to an ongoing relationship with a customer. Variables such as price, satisfaction, shared physical and communication assets, and skills and knowledge can be more important. This insight will give marketers an understanding of the complexity of the decisions faced by a large, multi-site company, while emphasising the importance of non-loyalty factors in the decision process.