Exploratory and Confirmatory Factor Analysis of the Perceived Switching Costs Model in the Business Services Sector

Switching costs has been recognised as a primary reason why dissatisfied customers stay with their suppliers. While a validated multidimensional scale of switching costs exists in a business-to-consumer context, there has been little empirical research effort devoted to operationalising different types of switching costs in business service relationships. This research strives to develop a model taking into consideration the various types of switching costs. Data was collected online from 453 Australian businesses using a key informant approach. While the initial Exploratory Factor Analysis (EFA) failed to produce the hypothesised six-factor model, a re-run of EFA identified a five-factor model, with Confirmatory Factor Analysis (CFA) demonstrating good fit statistics. The model has been empirically tested for unidimensionality, reliability and validity using CFA.