The hidden power of anticipated regret: how it shapes switching barrier-based service retention decisions

Purpose The effectiveness of switching barriers in deterring customer defection hinges on the psychological constraints they impose on customer decision-making; however, this underlying mechanism has received limited empirical attention. To address this gap, this study aims to investigate the psychological mechanism of anticipated regret in the relation between switching barriers and customer retention by examining both its mediating and moderating roles in deterring defection. Design/methodology/approach The authors investigate the influence of anticipated regret on switching barrier-based customer retention through two studies using a time-lagged, multiwave survey methodology that tracks both customers’ retention intention and actual behaviors. Findings The results indicate that customers’ anticipated regret not only mediates the relationship between switching barriers and retention intention but also moderates the association between retention intention and actual retention behavior. This inhibitive psychological mechanism provides additional explanatory power and offers a more comprehensive understanding of how switching barriers shape consumers’ retention decisions. Research limitations/implications Understanding customers’ diverse perspectives and the psychological mechanisms underlying their retention decisions is central to advancing service research. Addressing the significant gap in the customer retention literature, this study integrates anticipated regret into the established switching barrier–retention framework, enriching its theoretical foundation and opening new avenues for future research. Practical implications The findings reveal new marketing opportunities for enhancing service retention. Practitioners can strategically leverage anticipated regret in marketing communications, customer interactions and retention initiatives. By making potential future regret salient prior to customers’ final decisions, firms can prevent defection and retain customers who might otherwise exit. Social implications This research identifies how psychological inhibitors shape customer retention and underscores the importance of responsible practices that facilitate informed decision-making and value creation in customers’ best interests. Originality/value To the best of the authors’ knowledge, this study is among the first to examine the psychological mechanism of anticipated regret in switching barrier-based retention decisions. The authors theorize and empirically substantiate that, when evaluating the inhibitive obstacles that deter defection, consumers prioritize the avoidance of negative consequences arising from trade-offs and seek to minimize the likelihood of future regret over their eventual choice.