Key Factors Influencing Customer Retention Among Millennials: A Study of a Finnish Energy Utility
Salokangas, Juho (2017)
Salokangas, Juho
2017
Kuvaus
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Tiivistelmä
Since the European deregulation of the electricity markets, consumers have been free to choose their electricity provider from within the national market. Over the past decade, the annual share of customers in Finland, who switch their utility has increased from 4% to 11%. However, a majority of Finnish consumers have no prior switching experience, despite the economic benefit associated with switching service providers. In comparison to previous customer retention studies this study focuses particularly on the millennial viewpoint. They are found to differ in their use of technology and consumption values compared to previous generations.
The main objective of the study was to identify factors influencing university-educated, millennial customers’ decision to stay or depart the current electricity utility. An integrative framework was constructed based on the existing literature to evaluate the importance of variables such as customer satisfaction, switching barriers and personal values.
Through the use of abductive research approach, a complementary set of data was collected from two sources; a large numeric sample from an undisclosed Finnish electricity utility and in-depth, semi-structured interviews with ten millennials living in the capital region. The results of this thesis question the applicability of certain, existing customer retention frameworks among millennials. In addition, switching barriers related to learning costs and inertia were found to have large impact on millennials’ past switching behaviours and future switching intentions. With the support of existing customer retention strategies, a set of managerial implications are provided for utilities to adjust the way they interact with millennials in the Finnish market.
The main objective of the study was to identify factors influencing university-educated, millennial customers’ decision to stay or depart the current electricity utility. An integrative framework was constructed based on the existing literature to evaluate the importance of variables such as customer satisfaction, switching barriers and personal values.
Through the use of abductive research approach, a complementary set of data was collected from two sources; a large numeric sample from an undisclosed Finnish electricity utility and in-depth, semi-structured interviews with ten millennials living in the capital region. The results of this thesis question the applicability of certain, existing customer retention frameworks among millennials. In addition, switching barriers related to learning costs and inertia were found to have large impact on millennials’ past switching behaviours and future switching intentions. With the support of existing customer retention strategies, a set of managerial implications are provided for utilities to adjust the way they interact with millennials in the Finnish market.