Modeling the rationality of customers’ switching mobile services behavior

Abstract

This article analyzes the rationality of customer’s behavior when switching mobile services. Customer rationality is manifested by selecting the service provider capable of delivering the highest amount of benefits to the customer. A model based on multinomial logistics regression that makes use of the rational choice theory is developed to emulate customers’ service switching behavior and predicts the probability of switching mobile services. Customer rationality is assessed by comparing the choice predicted by the model with the true choice of customers and rationality is considered as achieved when a customer chooses a service provider that maximizes his/her benefit. The model was tested and validated by modeling the behavior of customers in the Jordanian telecommunication market and a rationality assessment was conducted. The results show that mobile service customers in Jordan are making rational decisions and would be willing to switch their current service provider if offered a better service. The study encourages service providers to challenge their assessment of customer loyalty and investigate new ways to enhance customer experience and guarantee customer loyalty.