Customer inertia marketing
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ORIGINAL EMPIRICAL RESEARCH
Customer inertia marketing Conor M. Henderson 1
&
Lena Steinhoff 2 & Colleen M. Harmeling 3 & Robert W. Palmatier 4
Received: 6 August 2018 / Accepted: 10 August 2020 # Academy of Marketing Science 2020
Abstract Inertia might secure consumers’ continued patronage, but it also can stunt potential expansion. By examining the psychology underlying inertia, this research informs managers about whether to engage inertial consumers proactively. In the proposed conceptual model, an inertia mindset orients a customer toward status quo consumption. This mindset emerges from dual sources, and each source consists of a behavioral and a psychological component. Specifically, the behavioral consistency of prior consumption activates an inertia mindset by prompting a psychological inclination to minimize thinking; the magnitude of prior consumption leads to inertia by evoking an inclination to minimize regret. Complementary survey and field studies offer support for the proposed model and reveal that a proactive loyalty reward can reinforce inertia based on regret minimization but disrupt inertia based on thinking minimization. Even well-intentioned marketing initiatives thus might be ineffective or detrimental, depending on the source and strength of inertia already present in the customer. Keywords Customer inertia . Mindset . Retention . Loyalty rewards . Customer relationship management
Customer churn is detrimental to financial performance (Gupta and Zeithaml 2006). This empirical generalization, along with the truism that it is easier and more profitable to generate revenue from existing customers than from Neil Morgan served as Area Editor for this article. Electronic supplementary material The online version of this article (https://doi.org/10.1007/s11747-020-00744-0) contains supplementary material, which is available to authorized users. * Conor M. Henderson [email protected] Lena Steinhoff [email protected] Colleen M. Harmeling [email protected] Robert W. Palmatier [email protected] 1
Lundquist College of Business, University of Oregon, Eugene, OR, USA
2
Institute for Marketing and Service Research, Faculty of Business and Social Sciences, University of Rostock, Rostock, Germany
3
College of Business, Florida State University, Tallahassee, FL, USA
4
Foster School of Business, University of Washington, Seattle, WA, USA
new customers, motivates firms to invest heavily in customer loyalty (Steinhoff et al. 2019; Watson et al. 2015). However, such investments may represent unnecessary expenditures that paradoxically reduce long-tenured customers’ excess value, if customer retention actually is driven by inertial support for the status quo (Breivik and Thorbjørnsen 2008; Corstjens and Lal 2000; Henderson et al. 2011; Vogel et al. 2008). Growing evidence indicates that in the presence of inertia, satisfaction may no longer affect repurchase—which challenges the conventional wisdom that boosting satisfaction is “the best solution to ensure customer retention” (Vo
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