Accounting & Marketing

The Impact of Unprofitable Customer Abandonment on Current Customers’ Exit, Voice, and Loyalty Intentions: An Empirical Analysis

Abstract

Mudassir Husnain

To manage relationships of unprofitable customer and mainly divesting is the area has receiving growing attention between researchers and practitioners over the past few years. The aim of paper is to explore the influence of abandonment of unprofitable customer on existing customers of abandoning firm, specially their exit voice and loyalty intentions. For the first time this study examines that how current customer that a company want to keep along reacts towards termination of unprofitable customer’s relationship. As a result, insights have been provided with regard to cost associated with the abandonment of unprofitable customer relationship a problem that has not been the focus of any empirical study nowadays. This is mainly an empirical study and a scale was settled to know the influence of constructs comprising; relational and structural constraints on exit, voice and loyalty intentions. The survey was circulated among the participants based on convenience sampling. Data were analyzed using correlation and regression analysis to assess the impact of abandonment of unprofitable customer on existing ones of abandoning firm. Study show that existing customers are more inclined and actively respond to abandonment of unprofitable customer in terms of exit/voice than passively through loyalty silence. Moreover, this indicates that current customers are less likely to limit the potential negative consequences, abandon unprofitable customer switching costs increase or satisfied.