Switching costs and ad agency-client relationship longevity: An exploratory study

Mark Alexander Davies, Melvin Prince

    Research output: Contribution to journalArticle

    7 Citations (Scopus)

    Abstract

    A model of switching costs is applied to ad agency-client relationships using agency theory. Switching costs are comprised of set-up costs that create barriers to switching to new agencies and exit costs that are barriers to severing relationships with current agencies. Switching cost theory offers insights into why large clients can maintain agency relationships. A survey of American clients shows how client size is associated with set-up and exit costs. These relationships are explained through diversity and scope of services, the creative risk associated with major brands, and the need for more sophisticated monitoring, each acting as switching barriers, extending longevity. © Taylor & Francis Group, LLC.

    Original languageEnglish
    Pages (from-to)146-159
    Number of pages14
    JournalServices Marketing Quarterly
    Volume32
    Issue number2
    DOIs
    Publication statusPublished - Apr 2011

    Keywords

    • Account longevity
    • Client size
    • Switching costs

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