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S/he will switch only if (p - g) + s + p/r < p + p/r
(p - g) is what s/he pays now, and s/he also incurs a switching cost s. From second month onward, s/he pays p, the present value of which is p/r. Note that p + p/r is what is costs to stay with the current provider.
The minimum g (goodies) that will make the subscriber indifferent between switching to the new provider and staying with the current provider can be found by making the net present value of what it will cost with the new service provider = net present value of what it will cost to stay with the current service provider.
That is p – gmin + s + p/r = p + p/r ……… (1)
This means gmin = s...
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Common topics in this essay:
- A RELATIONAL STUDY ON CUSTOMER SATISFACTION, TRUST , SWITCHING BARRIERS AND OVER ALL CUSTOMER RETENTION IN THE CONTEXT OF UNITREND LTD.
- A STUDY ON CUSTOMER’S ATTITUDE TOWARDS MOBILE SERVICE PROVIDER’S IN TIRUNELVELI
- Costs And Reliability
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- Telecom Service Provider Strategies
- What Role Does The Imf Play In The World Economy? What Are The Main Costs And Benefits Of Imf Adjustment Policies?
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- Accounting Costs
- How Do Variable Costs And Fixed Costs Differ?
- Multitasking ? Switching Costs
- Tuition Costs
- Winning at all costs
- Opportunity Costs
- Switching Costs
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