“Don't Forget that Others Are Watching,Too!” The Effect of Conversational Human Voice and Reply Length on Observers' Perceptions of Complaint Handling in Social Media

When dissatisfied customers voice their complaints on companies' social media pages, many other consumers can observe such interactions. Yet, only limited research has investigated how complaint handling is perceived by this online audience. Since the final outcome of the complaint is rarely visible publicly, the message characteristics (e.g., length and style) of company replies can represent signaling cues for observers of how the complaint is handled. The results of two experimental studies show that the use of conversational human voice (CHV) leads to more positive observer perceptions of complaint handling as opposed to when a corporate voice is employed. We found that interactional justice fully mediates this process and that satisfaction with complaint handling positively impacts corporate image and indirectly observers' WOM intentions. Surprisingly, high CHV can negatively affect procedural justice, but these effects are mainly offset through interactional justice, as the observers focus on the fairness in the communication exchange. Interestingly, our findings show that, in the case of low CHV, other cues such as the length of the company's reply significantly change perceived justice dimensions; however, the length of reply does not lead to such changes when high CHV is employed. Our studies bring novel findings that contribute to justice and signaling theories in the context of complaints management in social media. Managerial implications are discussed.     

Process completeness: Strategies for aligning service systems with customers’ service needs

Increasingly, customers are expecting more and better service. As such, enterprises need guidelines and frameworks for addressing these expanding requirements. The concept of process completeness helps us to consider service from the customer's viewpoint; arguably, the only perspective to take. Process completeness is achieved when a firm's service delivery system matches the typical customer's breadth of expectations. While customers think in sets of services (e.g., I need a flight, a hotel, airport parking, wireless Internet), firms think in terms of single services (e.g., we can provide a flight). There are four basic service systems: (1) transaction—execute a basic request and nothing else, (2) process—handling all firm-related service requests through one touch point, (3) alliance—handling service requests through a single touch point via stitching together a static firm-selected alliance of service partners, and (4) agility—handling service requests through a single touch point via stitching together a dynamic customer-selected alliance of service partners. In addition to exploring the four service systems, this article guides executives regarding the selection and implementation of the appropriate service strategy that meets their typical customer's process completeness expectations.     

When do customers offer firms a “second chance” following a double deviation? The impact of inferred firm motives on customer revenge and reconciliation

The present research develops and tests a theory explaining how customers respond to failed service recoveries (i.e., double deviations). This work offers three novel and important conclusions. First, inferences about a firm's motive (negative vs. positive) mediate the impact of perceptions of the double deviation (i.e., severity, blame, and fairness) on resulting outcomes (i.e., customer anger, desire for revenge, and desire for reconciliation). Second, when inferred motive is positive, desire for reconciliation overwhelms desire for revenge, leading customers to choose more reparatory than retaliatory behaviors. Third, following a double deviation, firms that both compensate and apologize to customers can change customers’ inferred motives from negative to positive, leading customers to desire more reconciliation than revenge, and engage in more reparatory than retaliatory behaviors. These studies demonstrate that, contrary to common wisdom, customers do not always respond negatively to a double deviation, and firms still have a “second chance” following a failed recovery.     

The effects of harm directions and service recovery strategies on customer forgiveness and negative word-of-mouth intentions

This study aims to investigate the direction of harm and the role of service recovery strategies on customer positive (i.e., forgiveness) and negative (i.e., word-of-mouth) intentions. We found that customer intentions are stronger among those who are directly affected by the service failure than indirectly affected customers. Further, we assess the role of service recovery in customer intentions after the service failure. The study findings contribute to the development of theory on the “other customers” effect by comparing the consequences of service failure directed at the focal customer and other customers and provide solutions to practitioners to reduce this damaging effect.     

“If you loved our product”: Do conditional review requests harm retailer loyalty?

Online retailers frequently solicit reviews from customers who have recently purchased their products or services. This research examines how consumers react to conditional requests—wherein a retailer explicitly asks them to consider their experience but to only leave a review if this experience was favorable—versus more neutral unconditional requests. The provision of conditional requests is widespread, presumably because retailers believe that such requests will yield more positive reviews. Irrespective of whether these potential benefits materialize, the present research demonstrates that the consequences of conditional requests on customer loyalty (i.e., retailer engagement and repeat purchase behavior) are uniformly negative and surprisingly expansive. Six experiments with over 3,000 participants reveal that customers who receive conditional (vs. unconditional) requests are subsequently less loyal to the retailer, whom they perceive as manipulative and untrustworthy. This research also shows that easily implementable message modifications can attenuate (although not necessarily eliminate) the adverse effects of conditional requests on customer loyalty. Substantively, this work highlights how the messaging used in a review request affects customers’ inferences as well as their later judgments and behaviors. Managerially, the findings should exhort online retailers to exercise caution before sending conditional review requests given the risk of reputational harm.     

The role of trade credit in the recent subprime financial crisis

This study tests firms’ financing behavior, especially the causal relation between trade credit and bank credit around the time of the recent subprime financial crises. I find bank credit and accounts payable/receivable are simultaneously determined and there is a substitute/complementary effect between bank credit and accounts payable/receivable. Moreover, I test a cross-sectional response to crisis and find that firms with a more vulnerable financial position (i.e., financially constrained firms) are more likely to be negatively affected by crisis and, in turn, are more likely to cut their supply of credit to customers and increase their use of credit from suppliers.     

Purchasing veg private labels? A comparison between occasional and regular buyers

Retailers are increasingly extending their private label assortments with meat-substitute, vegetarian and vegan foods (here called veg foods) to respond to emerging consumer trends. However, no studies on consumer buying behavior with regard to veg private labels exist. Accordingly, this work analyses the impact of ethical motives (i.e., environmental, animal welfare, health, and spiritual concerns) and perceptual factors (i.e., trust, perceived quality, and perceived value) as drivers of consumers' buying intentions of regular and occasional buyers of veg private labels, identified by their purchase frequency. The multigroup structural model findings show that occasional buyers are motivated by perceived quality, environmental, and animal concerns, while regular buyers opt for veg private labels on the grounds of their trust in the retailer's own-brand and environmentally-friendly claims. The perceived value is key for both segments.     

To divide or not to divide? The impact of partitioned pricing on the informational and sacrifice effects of price

Firms often partition a product??s price into two mandatory parts (e.g., the base price of a mail-order DVD and the surcharge for shipping and handling) instead of charging one all-inclusive price. This study examines whether and to what extent partitioned pricing (compared to one all-inclusive price) influences the informational and sacrifice effects of price. We empirically show that partitioned pricing oppositely affects these two distinct roles of price: the informational effect of price (i.e., price as an indicator of quality) increases, while the sacrifice effect (i.e., price as a measure of sacrifice) becomes more negative. In product categories with substantial price?Cquality inferences, the positive impact of partitioned pricing on the informational effect can overcompensate for its negative impact on the sacrifice effect, making partitioned prices the preferable strategy.     

Consumers’ Behavioral Intentions Toward Self-Service Technology in the Emerging Markets

ABSTRACT

Self-service technologies (SSTs) allow customers to offer their own service encounters via the interaction of electronic service interfaces or machines rather than by interacting with a firm's service personnel. This lack of personal interaction generates doubts and queries in the minds of the people, especially those unaware or less aware of these technology-based services. Such a situation is quite prevalent in the developing nations (like India), where still a large number of people are apprehensive about using the latest technologies. In this regard, the present study aims to develop an integrated model designed to predict and explain the various factors that influence customers’ behavioral intentions to use or not to use one particular SST (i.e., ATM services). The study finds that bank customers are less innovative and less optimistic to try out new technologies. Usefulness of the technology helps in developing positive attitude toward the technology, which in turn affects customers' intentions to use that technology.     

On the Go: How Mobile Shopping Affects Customer Purchase Behavior

Mobile shopping (M-shopping) has become increasingly important in marketing and retailing. Using a unique dataset from an Internet-based grocery retailer, we evaluate changes in customers’ spending behavior upon adopting M-shopping, i.e., using smartphones or tablets to compose, modify, or place orders online. We find that order rate, i.e., number of orders placed per year, increases as customers adopt M-shopping. Especially for low-spending customers, both their order rate and order size, i.e., the amount of the order in dollars, increase as they become accustomed to M-shopping. In addition to the effect on customer's spending behavior, we also find that M-shoppers tend to use mobile devices to shop for habitual products that they already have a history of purchasing. We propose that customers utilize mobile devices because the technology provides convenient access, which leads them to incorporate M-shopping into their habitual routines. Managerially, we recommend that firms should fully leverage their mobile platforms, but they should also keep in mind that mobile devices may not be the most optimal channel for launching new products or promoting products that require more consideration during the buying process.     

A multi-country study of bank reputation among customers in Africa: Key antecedents and consequences

This paper studies the antecedents related to service quality and the consequences of bank reputation among bank customers in three prominent markets in Africa, the continent on which one of the banking industries with the highest potential in the world is located. The research hypotheses were tested through the use of partial least squares modelling and by employing data collected from almost 1000 retail-banking customers from Ghana (n = 349), Kenya (n = 337), and South Africa (n = 300). An analysis of these data indicates that service quality dimensions, namely service offering appeal and customer care, meaningfully contribute to the strong perceptions customers have of their banks as regards reputation. The positive role of bank reputation in the development of trust and customer loyalty is also validated in this study. Furthermore, the multi-group analysis shows differences among countries in the case of all the relationships analysed, with the exception of the weight of customer care on bank reputation. Finally, the conclusion is reached that bank managers should focus their reputational strategies on improving the competitiveness of their bank products and should consider subtle institutional differences outside the bank's home-country in order to succeed in their internationalization strategies on the continent.     

Patterns of Herding and their Occurrence in an Online Setting

When groups of consumers share information or express their opinions about products and services, their attitudes or behavior sometime align without centralized coordination, a phenomenon known as herding. Building on pattern-based explanations of herding from the cognitive science literature, we propose a framework to elucidate herding behavior based on three dimensions: the speed of contagion, i.e., the extent to which the behavior spreads in a given time, the number of individuals, i.e., the proportion of the whole population expressing the behavior, and the uniformity of direction, i.e., the extent to which the mass behavior is increasingly uniform with one variant becoming dominant. Based on these dimensions, we differentiate eight patterns of herding behavior from slowly diffusing, small and disparate groups through to rapidly spreading, massive herds expressing a convergent behavior. We explore these herding patterns in an online setting, measuring their prevalence using over four thousand streams of data from the online micro-blogging application, Twitter. We find that all eight patterns occur in the empirical data set although some patterns are rare, particularly those where a convergent behavior rapidly spreads through the population. Importantly, those occurrences that develop into the pattern we call “stampeding,” i.e., the rapid spread of a dominant opinion expressed by many people, generally follow a consistent development path. The proposed framework can help managers to identify such noteworthy herds in real time, and represents a first step in anticipating this form of group behavior.     

Does justice affect brand advocacy? Online brand advocacy behaviors as a response to hotel customers’ justice perceptions

This study focuses on customers' information-sharing behavior in the context of online brand advocacy behavior regarding hotel brands. We aim to explain hotel customers' online brand advocacy behavior through three-sided justice evaluations (i.e., justice for employees, justice for the self, and global belief in a just world), and their hotel satisfaction. Hypotheses are tested by using survey data acquired from 688 individuals on Amazon's Mechanical Turk (MTurk) through partial least squares structural equation modeling (PLS-SEM). The findings show that customers' perceptions of justice for the self positively affect their hotel satisfaction, perceptions of justice for employees and the global belief in a just world positively affect online brand advocacy behavior, and hotel satisfaction also positively affects online brand advocacy behavior. We expand current research efforts on online brand advocacy research and provide theoretical and managerial implications for the development of marketing and management research and practice.     

Persuasive location-based messaging to increase store visits: An exploratory study of fashion shoppers

Although it appears increasingly important yet potentially challenging to attract customers to physical stores, location-based messaging, i.e., delivering mobile phone messages using data about the recipient's location when that recipient is near the sender, has been said to enable such attraction. Still, existing studies offer very limited insight into which particular location-based persuasion approach retailers should use. Drawing on persuasion theory, this exploratory study aims to investigate and compare the potential of two discrepant persuasion techniques (scarcity and social proof) to influence customers' experiences and thereby stimulate them to visit the retailer's physical store. A factorial survey design was applied to test the research model. Data were collected from a sample of actual customers of a Dutch fashion retailer (n = 579). The results suggest that scarcity is a more effective persuasion technique in the studied context than social proof; scarcity-focused messages appear to be experienced as more informative, more entertaining and less irritating, seem to be valued more because of this, and are thus more likely to incline customers to visit the store. We discuss these findings and their implications for theory as well as for practice.     

Managing Customer Relationships by Gender

ABSTRACT

Purpose: Although relational bonds (i.e., structural bonds, social bonds, and financial bonds) positively contribute to customer loyalty, no study has yet examined the relative effectiveness of such relationship strategies on female and male customers. Moreover, businesses must make a tradeoff between improving one and the other bonds, warranting research into allocating resources effectively to improve them. Therefore, this study investigates whether and how marketers should strive to improve such bonds differently according to customer gender.

Methodology/approach: A cross-sectional design was implemented. The data consist of questionnaires filled out by a representative sample of 425 directors of animal hospitals. The sample is representative with regard to gender composition. By using confirmatory factor analysis, study items exhibited adequate reliability and validity. Quadratic regressions were used for testing the study hypotheses.

Findings: For female customers, relational bonds have concave relations with their loyalty (i.e., initial increases in relational bonds boost loyalty effectively while subsequent increases of relational bonds only raise loyalty marginally). However, for male customers, relational bonds have convex relations with their loyalty (i.e., initial increases in relational bonds raise loyalty less effectively than subsequent increases in relational bonds).

Originality/value/contribution: Results of this study are among the first to suggest that when targeting female customers, marketers should allocate their resources to improving all relational bonds to moderate levels. Conversely, when targeting male customers, marketers should concentrate their resources on creating an extremely strong relational bond. Managing customer relational bonds by gender can effectively cultivate loyal customers of each gender. This study is one of the first studies examining how to manage customer relational bonds by gender.     

Consumer complaints and redress: an important mechanism for protecting and empowering consumers1

This paper explores a consumer complaint programme as a tool for empowering consumers, using the consumer complaint programme of a United States federal agency as a case study. After describing the structure and role of the Federal Reserve System (the central bank of the United States) in handling complaints, the paper follows a complaint through the System, looks at trends in complaints and provides a profile of consumers who complain. The paper concludes with information on the economic impact of complaint resolution and consumer satisfaction with third‐party complaint investigation.     

What drives customer engagement after a service failure? The moderating role of customer trust

This study investigated the relationships between complaint handling, customer experience, and customer engagement, as well as the moderating effect of customer trust prior to a service failure. The results were obtained from 320 Indonesian consumers of courier, express, and parcel services. Favourable employee behaviour was found to be the most effective complaint handling effort that influenced customer experience, followed by organizational procedures and then compensation, indicating that positive customer experience led to customer engagement. Additionally, this study revealed that higher levels of customer trust prior to a service failure reduced the positive effects of complaint handling efforts on customer experience. This finding suggests that customers with higher levels of trust in a firm are less sensitive to that firm's complaint handling and recovery efforts. This article contributes to the literature on customer engagement in the service failure and recovery contexts, especially in developing countries. It examines the most influential complaint handling dimensions for predicting customer engagement following service failures. Furthermore, this study is one of the first to explore the moderating role of customer trust in service failure and recovery literature.     

Virtual customer environment design and organizational innovation: An exploration–exploitation perspective

ABSTRACT

Many firms are developing virtual customer environments (VCEs) that provide customers the opportunity to submit, discuss, and vote for new ideas. Some studies show that VCEs promote the development of incremental improvements in existing products and services (i.e., exploitative innovation). However, other studies find that customers working in VCEs will often suggest radical ideas for brand new products and services (i.e., exploratory innovation). Exploration and exploitation are often incompatible; thus, we address this paradox by investigating whether the design of a firm’s VCE architecture is related to the firm’s exploratory innovation activity and exploitative innovation activity. Using matched data collected from VCEs and managers, we show that two-way information exchange VCE tools facilitate exploratory innovation, and one-way information exchange VCE tools enhance exploitative innovation. We also find that absorptive capacity positively moderates the latter relationship. Our findings have implications for research and practice in VCEs, organizational innovation, and organizational learning.     

Marketing Concept Manifestations in Fiji Enterprises: Confirming the Link to Organizational Competitiveness

ABSTRACT

This paper proposes an integrative view of the marketing concept (i.e., the ability to understand and satisfy customers) and examines its prevalence and effect on competitiveness in organizations operating in an isolated and less economically developed country. The marketing concept manifests as marketing expertise, market orientation, and externally directed organizational values. Based on a sample of 86 firms operating in Fiji, the results indicate that these three mechanisms promote organizational competitiveness, thus supporting the universality of the marketing concept. These findings confirm the important role of the marketing concept in the competitiveness of firms in a less developed economy.     

Estimating Contagion on the Internet: Evidence from the Diffusion of Digital/Information Products

Even as the Internet continues to grow as a global platform for communication and commerce, the success of new value offerings on the Internet hinges on acquisition of new customers and retention of existing customers. Central to the flow of customers in and out of trial and repeat behavior in this burgeoning and dynamic environment, characterized by diversity among both producers and consumers of value offerings, is the process of social contagion—active word of mouth that flows among customers or passive observation of others. To estimate contagion on the Internet, the authors develop a trial-repeat purchase diffusion model for successive innovations in value offerings on the Internet. The model extends the state-of-the-art diffusion modeling by incorporating (i) dynamic market potential, (ii) heterogeneity among first-time triers, (iii) heterogeneity in word of mouth due to repeat buyers and non-repeaters (i.e., positive and negative word of mouth), and (iv) dynamic repeat purchase rate. The model also incorporates the influence of product characteristics, specifically source of innovation (i.e., whether the innovation is driven by environmental needs or competitive pressures) and product bundling, and competition. The authors test the model with weekly adoption data for 11 computer software products available on the shareware system, involving over 100 new versions in the period 1991–1994, and in a market whose size grows by a factor of fifty from early 1991 to late 1994. The findings clarify the role of word of mouth effects, competition, and product characteristics in fostering the diffusion process for digital information goods.