Customer Equity Drivers, Customer Experience Quality, and Customer Profitability in Banking Services: The Moderating Role of Social Influence

Abstract

Financial service organizations are increasingly interested in ways to improve the service experience quality for customers, while customers progressively perceive the commoditization of banking services. This is no easy task, as factors outside the control of the service firm can influence customers’ perceptions of their experience. This study builds on the customer equity framework to understand the linkages between what the firm does (customer equity drivers: value equity, brand equity, and relationship equity), the social environment (social influence), the customer experience quality, and its ultimate impact on profitability. Using perceptual and transactional data for a sample of customers of financial services, we demonstrate the central role played by factors under the control of the firm (value, brand, and relationship equity) and those outside its control (social influence) in shaping customers’ perceptions of the quality of their experience. We offer new insights into the moderating role of social influence in the linkages between the customer equity drivers and the customer experience quality. The managerial takeaway is that the impact of customer equity drivers on the customer experience quality is contingent on the influence exerted by other people and that enhancing customer experience quality can be a way to increase monetary returns.

Moving the Customer Experience Field Forward: Introducing the Touchpoints, Context, Qualities (TCQ) Nomenclature

“…Non-firm-controlled touchpoints are predominantly controlled by the customer, influencers, or other brands or firms (Kranzbühler, Kleijnen, and Verlegh 2019; Lemon and Verhoef 2016). As shown in Table 2, the CX(M) literature is dominantly focused on firm-controlled touchpoints (100% of the papers in our sample), but we observe a growing recognition of non-firm-controlled touchpoints (46.85%, e.g., Lemon and Verhoef 2016), with especially the role of other customers for CX(M) being recognized (e.g., Brocato, Voorhees, and Baker 2012; Gao, Melero-Polo, and Sese 2020; Grove and Fisk 1997; Verhoef et al 2009). More recently, there is also an increased interest into the role that other brands/firms play through the lens of service delivery networks (e.g., Tax, McCutcheon, and Wilkinson 2013) and branded outsourcing activities (e.g., Kranzbühler, Kleijnen, and Verlegh 2019).…”

Customer experience quality surpasses NPS in correlation to financial performance, customer loyalty and customer satisfaction

“…The results of this study provide additional evidence that NPS is not the only "one number you need to grow" (Reichheld, 2003, p46) when measuring customer loyalty and satisfaction, and a multidimensional metric that includes emotional, attitudinal, and quality-based factors is needed (Gao, Merelo-Polo, & Sese, 2019;Gronholdt, 2019;Keiningham et al, 2019;Mbama, 2018) to capture the sum of a customer's experience with a company's products and services.…”

Real-Time Brand Reputation Tracking Using Social Media

“…The following considerations contribute to the choice of this framework: First, the conceptual attraction of this framework has been well recognized in the academic community and recognized with several article and book awards. Second, the three customer equity drivers have been validated conceptually and empirically in many subsequent studies, using data from multiple countries; incorporating both perceptual survey and behavioral data; and considering industries, firms, and consumer characteristics; and they have been gauged using various firm performance variables (e.g., loyalty intentions, future sales, customer experience quality) (Gao, Melero-Polo, and Sese 2020;Leone et al 2006;Ou et al 2014;Ou, Verhoef, and Wiesel 2017;Vogel, Evanschitzky, and Ramaseshan 2008). Third, this framework was designed to map to strategic expenditures and thus has high managerial actionability.…”

“…The tracker also contributes to the customer equity literature. To date, most customer equity research has either relied on cross-sectional surveys for data collection (e.g., Gao, Melero-Polo, and Sese 2020;Ou et al 2014;Ou, Verhoef, and Wiesel 2017;Rust, Lemon, and Zeithaml 2004;Vogel, Evanschitzky, and Ramaseshan 2008) or sacrificed granularity by using aggregate acquisition and retention statistics (e.g., Gupta, Lehmann, and Stuart 2004;Kumar and Shah 2009;Villanueva, Yoo, and Hanssens 2008;Wiesel, Skiera, and Villanueva 2008). We show that the tracker correlates significantly positively with other well-known aggregate brand rankings, such as Interbrand, Forbes, and BrandZ, and correlates significantly positively with YouGov's daily brand measures of brand word of mouth (WOM) and brand buzz.…”