Domestic versus offshore service providers: The impact of cost, time, and quality sacrifices on consumer choice

Abstract

Purpose

Prior research has determined that consumers are opposed to services offshoring. The purpose of this paper is to determine the likelihood that consumers would choose a domestic vs an offshore service provider if asked to pay more, wait longer, or sacrifice service quality.

Design/methodology/approach

The cost, time to wait, and quality of services provided (for two different services: taxes and customer service) were varied to determine respondent likelihood to choose a domestic as opposed to an offshore service provider when asked to pay more, wait longer, or sacrifice the quality of the service in return for access to a domestic service provider. Data were collected via survey research, using an internet panel.

Findings

Results of repeated measures analysis indicated that customer loyalty to the domestic service provider significantly decreased as the cost or time to interact with a domestic service provider increased or the quality of service provided by the offshore service provider increased.

Research limitations/implications

The research results signify that while customers, in general, may be opposed to services offshoring, they will “defect” or show less loyalty to the domestic service provider when asked to sacrifice time or money for that access. Respondents were asked to react to each trade-off as individual factors. Future research might combine these factors to determine interrelated tradeoffs.

Practical implications

The research results signify that while customers, in general, may be opposed to services offshoring, they will “defect” or show less loyalty to the domestic service provider when asked to sacrifice time or money for that access.

Originality/value

The paper extends research with regard to consumer reaction to service offshoring and provides insight into the trade-offs consumers might be willing to incur in return for access to domestic service providers. The paper is of value to practitioners and academic researchers.

Citation

Forman, A.M., Thelen, S. and Shapiro, T. (2015), "Domestic versus offshore service providers: The impact of cost, time, and quality sacrifices on consumer choice", Journal of Service Management, Vol. 26 No. 4, pp. 608-624. https://doi.org/10.1108/JOSM-01-2015-0020