Brand defection in a business-to-business financial service

This research examines the reasons for brand defection in a business-to-business financial service. Three cross-sectional studies examine customers who ceased using a brand in the previous month. The research shows that about 60% of brand defection occurs for reasons that brand managers cannot influence, such as business closure or head office decisions. Hence, retention strategies can have a maximum success rate of 40%. Furthermore, most defection within this 40% relates to dissatisfaction with fees and charges, or the attractiveness of competitorsʹ offers. These reasons limit what brand managers can do to retain these customers other than just matching competitorsʹ offers. On the other hand, most customers who defect because of price issues or reasons beyond management control still have a positive attitude towards their former brand and are likely to consider this brand for future purchases. Only 4% of lapsed customers defect because of service service-related issues. These customers are less positive about their former brand, compared to other lapsed customers. The research provides implications for investments in customer acquisition versus customer retention.