Agency and trust mechanisms in consumer satisfaction and loyalty judgments

The authors propose a framework for understanding key mechanisms that shape satisfaction in individual encounters, and loyalty across ongoing exchanges. In particular, the framework draws together two distinct approaches: (1) agency theory, rooted in the economic approach, that views relational exchanges as encounters between principals (consumers) and agents (service providers) and (2) trust research that adopts a psychological approach toward consumer-provider relationships. In so doing, the authors specify how trust mechanisms cooperate and compete with agency mechanisms to affect satisfaction in individual encounters and influence loyalty in the long run. Because a multidimensional conceptualization of trust is used, the hypothesized framework offers a fine-grained understanding of the interrelated mechanisms. The high level of specificity allows extraction of multiple propositions, facilitates empirical testing, and encourages theoretical development of the proposed model. Several directions to guide future research are provided. Jagdip Singh is Professor of Marketing at the Weatherhead School of Management at Case Western Reserve University. His current research interests include consumer dissatisfaction and complaint responses, O-P-C (organization-person-customer) processes that occur in frontline/boundary roles, and measurement issues in marketing. He has published in theJournal of Marketing, theJournal of Marketing Research, theJournal of the Academy of Marketing Science, theJournal of International Business Studies, andPsychological Assessment, among others. Deepak Sirdeshmukh is Assistant Professor of Marketing at the Weatherhead School of Management at Case Western Reserve University. His current research involves a multiindustry examination of the role of trust in building consumer-firm relationships. Other research interests include consumer evaluation of brand extensions and consumer information processing. He has published in theJournal of Marketing Research, theJournal of Consumer Research, and theJournal of Consumer Psychology.