Switching Costs, Satisfaction, Loyalty and Willingness to Pay for Office Productivity Software

Abstract
Despite the availability of several free and lowercost
alternatives, the multi-billion dollar market for
office productivity software suites (OPSS) is dominated
by Microsoft Office. Theoretical and empirical
research has typically attempted to explain such
customer loyalty from the perspective of customer’s
satisfaction. However, although loyal customers are
typically satisfied, satisfaction alone can be an
unreliable predictor of loyalty. This research examines
how switching costs can impact loyalty in a context
where network effects may dominate. Additionally, the
research measures how loyalty impacts customer
willingness to pay (WTP) using a contingent valuation
approach. The results reveal that switching costs do
increase consumers’ loyalty and WTP. For OPSS
loyalty is a significant contributor to increased WTP.
Implications for research and practice are discussed.

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