Does Customer Demotion Jeopardize Loyalty? Wagner, Tillmann; Hennig-Thurau, Thorsten; Rudolph, Thomas
Journal of marketing,
05/2009, Volume:
73, Issue:
3
Journal Article
Peer reviewed
Open access
Hierarchical loyalty programs award elevated customer status (e.g., "elite membership") to consumers who meet a predefined spending level. However, if a customer subsequently falls short of the ...required spending level, firms commonly revoke that status. The authors investigate the impact of such customer demotion on loyalty intentions toward the firm. Building on prospect theory and emotions theory, the authors hypothesize that changes in customer status have an asymmetric negative effect, such that the negative impact of customer demotion is stronger than the positive impact of status increases. An experimental scenario study provides evidence that loyalty intentions are indeed lower for demoted customers than for those who have never been awarded a preferred status, meaning that hierarchical loyalty programs can drive otherwise loyal customers away from a firm. A field study using proprietary sales data from a different industry context demonstrates the robustness of the negative impact of customer demotion. The authors test the extent to which design variables of hierarchical loyalty programs may attenuate the negative consequences of status demotions with a second experimental scenario study and present an analytical model that links status demotion to customer equity to aid managerial decision making. PUBLICATION ABSTRACT
This research provides an empirical test of the “Twitter effect,” which postulates that microblogging word of mouth (MWOM) shared through Twitter and similar services affects early product adoption ...behaviors by immediately disseminating consumers’ post-purchase quality evaluations. This is a potentially crucial factor for the success of experiential media products and other products whose distribution strategy relies on a hyped release. Studying the four million MWOM messages sent via Twitter concerning 105 movies on their respective opening weekends, the authors find support for the Twitter effect and report evidence of a negativity bias. In a follow-up incident study of 600 Twitter users who decided not to see a movie based on negative MWOM, the authors shed additional light on the Twitter effect by investigating how consumers use MWOM information in their decision-making processes and describing MWOM’s defining characteristics. They use these insights to position MWOM in the word-of-mouth landscape, to identify future word-of-mouth research opportunities based on this conceptual positioning, and to develop managerial implications.
ABSTRACT
Service scripts are behavioral and verbal prescriptions used in many organizations as a way of standardizing employees’ behaviors during their interactions with customers. Yet, they have ...rarely been studied empirically. There are mixed suggestions in the literature about the beneficial vs. detrimental effects of service scripts. Based on social exchange and citizenship behavior theories, this study investigates whether the relationship between service scripts and an important customer outcome, customer citizenship behavior (CCB), depends on employees’ level of customer orientation. Based on 285 matched dyads of employees and customers from a variety of service organizations, the study found that when service scripts are performed by employees with low customer orientation, service scripts have more detrimental effects on CCB in terms of reducing the propensity among customers to provide unsolicited feedback and their intentions to return to the service firm. There was also support for the mediating role of perceived service quality in accounting for these contingent relationships. These findings contribute to the literature on managing employee behavior and CCB.
In this research, we extend emotional labor theories to the customer domain by developing and testing a theoretical model of the effects of employee emotional labor on customer outcomes. Dyadic ...survey data from 285 service interactions between employees and customers show that employees' emotional labor strategies of deep and surface acting differentially influence customers' service evaluations and that customers' accuracy in detecting employees' strategies can intensify this impact. We also investigate the potential moderating effects of service type on the relationship between emotional labor and customer outcomes but find no support for such an effect.
Through Web-based consumer opinion platforms (e.g., epinions.com), the Internet enables customers to share their opinions on, and experiences with, goods and services with a multitude of other ...consumers; that is, to engage in electronic word-of-mouth (eWOM) communication. Drawing on findings from research on virtual communities and traditional word-of-mouth literature, a typology for motives of consumer online articulation is developed. Using an online sample of some 2,000 consumers, information on the structure and relevance of the motives of consumers’ online articulations is generated. The resulting analysis suggests that consumers’ desire for social interaction, desire for economic incentives, their concern for other consumers, and the potential to enhance their own self-worth are the primary factors leading to eWOM behavior. Further, eWOM providers can be grouped based on what motivates their behavior, suggesting that firms may need to develop different strategies for encouraging eWOM behavior among their users.
In the past twenty years, the video game industry has established itself as a significant contributor to the global entertainment economy. Compared to more established entertainment industries such ...as movies and music, limited scholarly research in marketing has addressed the processes that create value for companies and consumers in the context of video games which are now available on multiple devices (e.g., consoles, portables, mobile devices) and through multiple channels (e.g., retail and online). The authors therefore develop a conceptual framework of value creation through video games, highlight important findings from extant research in marketing and other disciplines, and apply the framework to derive future research opportunities.
•The authors address the processes that create value in the context of video games.•They develop a conceptual framework of value creation through video games.•They highlight important findings from extant research in different disciplines.•They apply the framework to derive future research opportunities.
How can service firms manage displays of frontline service employees most effectively? Building on organizational control theory, this research develops a typology of employee display controls for ...routine service delivery that distinguishes three formal controls (aesthetic, emotional, and verbal) and organizational culture as informal control, and tests their effects on service customers, assuming frontline employees implement controls. A role-playing experiment involving repeat service customers reveals that informal cultural control has a greater effect on customer outcomes than do formal controls. Specifically, cultural control exerts positive effects on customer arousal, perceived service quality, and trust in the frontline employee; formal controls have no significant or even negative effects. The findings suggest that service companies should reconsider their formal control strategies and increase their use of cultural controls.
When governments mandated lockdowns to limit the spread of the coronavirus, the resulting reduction of face-to-face communication threatened many people's psychological well-being by fostering ...feelings of loneliness. Given social media's eponymous social nature, we study the relationship between people's social media usage and their loneliness during these times of physical social restrictions. We contrast literature highlighting the social value of social media with a competing logic based on the "internet paradox," according to which increased social media usage may paradoxically be associated with increasing, not decreasing, levels of loneliness. As the extant literature provides opposing correlational insights into the general relationship of social media usage and loneliness, we offer competing hypotheses and offer novel longitudinal insights into the phenomenon of interest. In the empirical context of Germany's initial lockdown, our research uses survey panel data from February 2020 (before the lockdown) and April 2020 (during the lockdown) to contribute longitudinal evidence to the matter. We find that more usage of social media in the studied lockdown setting is indeed associated with more, not less loneliness. Thus, our results suggest a "social media paradox" when physical social restrictions are mandated and caution social media users and policy makers to not consider social media as a valuable alternative for social interaction. A post-hoc analysis suggests that more communication via richer digital media which are available during physical lockdowns (e.g., video chats) softens the "social media paradox". Conclusively, this research provides deeper insights into the social value of social interactions via digital media during lockdowns and contributes novel insights into the relationship between social media and loneliness during such times when physical social interaction is heavily restricted.
This research distinguishes between employees' customer orientation (ECO) and customer orientation as perceived by customers (COPC) to investigate the contingencies of the relationship between these ...two constructs. Drawing on emotional contagion theory and using a dyadic field study design, the authors examine whether ECO affects COPC, as well as whether the link between ECO and COPC might be mediated by employees' authentic emotional displays. They also examine service scripts and the accuracy with which customers detect employees' authentic emotional displays as moderators of this mediated link. The findings confirm the important role of ECO as an influence on COPC and provide evidence that employees' authentic emotional displays mediate the effects of ECO. In addition, service scripts and customers' detection accuracy have moderating effects.
Emotional dissonance resulting from an employee's emotional labor is usually considered to lead to negative employee outcomes, such as job dissatisfaction and emotional exhaustion. Drawing on ...Festinger's (1957) cognitive dissonance theory, we argue that the relationship between service employees' surface acting and job dissatisfaction and emotional exhaustion is moderated by 2 aspects of a service worker's self-concept: the importance of displaying authentic emotions (reflecting the self-concept's self-liking dimension) and the employee's self-efficacy when faking emotions (reflecting the self-competence dimension). A survey of 528 frontline employees from a wide variety of service jobs provides support for the moderating role of both self-concept dimensions, which moderate 3 out of 4 relationships. Theoretical and practical implications are discussed from the perspectives of cognitive dissonance and emotional labor theories. (Contains 2 tables, 2 figures and 2 footnotes.)
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