Relative fixed Internet connection speed experiences as antecedents of customer satisfaction and loyalty: An empirical analysis of consumers in Germany

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Abstract

So far, management practitioners and scholars alike assume that raises in the contractual absolute maximum bandwidth of Internet connections increase the attitudinal bonds of customers with their access provider. The present study broadens this perspective: In a sample of up to 752 German-speaking Internet users with a wireline Internet access at home, it explores two relative speed characteristics of broadband connections as potential determinants of customer affinity with an access provider. The two reference-dependent aspects comprise customer quality experiences in terms of delivered transmission speeds (1) relative to the maximum down- and upload bandwidths as per customer contract, and (2) relative to speeds emphasized in advertisements of a consumer’s access provider. Furthermore, correlations are analyzed between the frequency with which customers use speed tests to check the quality of their wireline Internet connection and their attitudinal bonds with their access provider. Attitudinal bonding is broken down into customer satisfaction with the performance of the current wireline Internet access at home and propensity to churn at the earliest opportunity. Multivariate regression analysis reveals that the impression that advertised wireline access bandwidths are exaggerated compared to the speeds actually delivered and – to a lesser extent – the perception that the contractual maximum speed is reached only in a low share of a customer’s Internet sessions significantly decrease customer satisfaction and significantly increase customer inclination to churn. The effects of the two speed assessments are not independent of one another: Perceived speed exaggerations in a provider’s ads impair customer bonds less (more) strongly if the experienced share of Internet sessions with speeds below the contractual maximum bandwidth is high (low). More frequent speed testing reduces customer bonding, especially in case that advertised speeds of a customer’s provider are experienced as overblown. The results suggest that wireline Internet access providers can increase the attitudinal bonds with their customers by abstaining from emphasizing maximum speeds in their advertising, which customers rarely reach under standard everyday conditions.

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