Service Quality on Consumer Loyalty in Chinese Auto Service Shops through Mediating Effects of Consumer Satisfaction and Moderating Effects of Switching Costs: Theoretical Framework and Empirical Analysis

Research increasingly suggests the importance of switching costs in customer retention strategies. The aim of this paper is to examine the mediating effects of consumer satisfaction and the moderating effects of switching costs in the process of Chinese consumers forming satisfaction about service quality of 4S Auto Shop. Samples of this study were distributed to Chinese consumers from May 1 to May 7, 2017. For a total of 239 collected questionnaires. To verify the study hypothesis, path analysis on 237 collected samples is conducted through the structural equation model. The empirical analysis result shows that, firstly, there is a direct positive correlation relationship between service quality of 4S Auto Shop and consumer satisfaction, service quality of 4S Auto Shop and consumer loyalty, as well as between consumer satisfaction and loyalty; secondly, consumer satisfaction acts as a mediator in this process. Thirdly, switching costs was found to have a positive impact on consumer’s loyalty through interaction with service quality as a moderator. In other words, the moderating effect of switching costs on the relationship between relationship service quality of 4S Auto Shop and customer loyalty is significant. This paper implicates that, service providers of 4S auto shops to obtain higher profits, they need to build strong ties with consumers, increase personalization or provide additional services. In other words, consumer loyalty can be strengthened by efforts to maximize associated switching costs rather than inherent switching costs.