Strategizing for retention. An exploratory cross-sectional case study of switching barriers within service-based KIE firms’ retention strategies in B2B.

Abstract

This thesis investigates the strategic mechanisms employed by service-based Knowledge-Intensive Entrepreneurship (KIE) firms to retain and prolong client relationships. KIE firms, known for high innovation and complexity, face significant client retention challenges due to limited resources and intense competition. The study focuses on identifying the types of switching barriers these firms use to deter client defection and enhance retention. KIE firms play a vital role in addressing societal and environmental challenges through innovation. However, their early stages often encounter difficulties, such as limited resources and fierce competition. The survival and sustainability of these firms heavily rely on their ability to retain clients. Effective client retention strategies are essential for these firms to navigate the competitive landscape and ensure business continuity. An exploratory cross-sectional case study approach was employed, examining the retention strategies of two KIE firms, referred to as "ALPHA" and "BETA." The research aimed to identify the switching barriers used by these firms and how these barriers evolve across different stages of the service relationship lifecycle. Data was collected through semi-structured interviews, company documents, and relevant literature, providing a comprehensive view of the strategic tools and mechanisms in use. The analysis reveals that both firms utilize a combination of switching barriers, including relational, contractual, financial, and technological elements, to enhance client retention. These barriers help create an environment where clients are less likely to switch providers, ensuring long-term relationships. Future research should evaluate the client’s perspective on switching barriers to measure the efficacy of retention strategies. Contrasting the client’s perception of barriers with the selling firm’s intended barriers is crucial. Additionally, quantitative studies can examine how the cumulative effect of switching barriers influences clients' willingness to defect. Exploring the strategic management behaviors of KIE firms, particularly those addressing grand societal challenges, can provide further insights into their efforts to sustain operations and maximize impact in their early stages.