It’s just not fair: exploring the effects of firm customization on unfairness perceptions, trust and loyalty

Abstract

Purpose – The purpose of this study is to (a) develop a conceptual framework exploring the relationships between perceived negative firm customization, unfairness perceptions, and customer loyalty intentions, and (b) investigate the moderating effects of trust in these relationships. The study explores how customizing offers to match customers’ individual needs and how treating customers differentially provoke unfairness perceptions among those not being considered most important. While the literature discusses unfairness perceptions of pricing, promotion, and service, less is known about unfairness in customization practices. Design/methodology/approach – Using a survey approach, 443 completed questionnaires we collected. Following validation of our item measures, a hierarchical linear regression analysis was conducted to test the conceptual model and hypothesized linkages between our constructs. Findings – The results demonstrate that customers’ negative perceptions of customization increase their unfairness perceptions. Unfairness perceptions drastically reduce customer loyalty intentions with trust acting as a significant moderator. Trust increases loyalty intentions even when unfairness perceptions are present. Our findings provide a foundation for understanding how firms may improve their perceived fairness. This increase in perceived fairness creates positive attributions, reduces negative customer experience perceptions and increases loyalty intentions. Originality/value – Key contribution is the development and validation of a conceptual model explaining the linkages between firm customization and unfairness perceptions, firm customization and customer loyalty intentions and the moderating role of trust between these relationships. This study extends the understanding of how customization practices impact unfairness perceptions and, subsequently, influence consumers’ perceptions, intentions and behavior.

I Earn It, But They Just Get It: Loyalty Program Customer Reactions to Unearned Preferential Treatment in the Social Servicescape

“…All dependent variables and manipulation checks were measured on a 7-point Likert-type scale with multiple items from the literature: four items for perceived status (Drèze & Nunes, 2009), three items for perceived distributive justice (Blader & Tyler, 2003), three items for customer loyalty to the program, and three items for customer loyalty to the firm (Nguyen, Klaus, & Simkin, 2014;Zeithaml, Berry, & Parasuraman, 1996). Reliability tests showed high internal reliability, with Cronbach's alpha values ranging from .85 to .93 for Study 1.…”

The missing link: Fairness as the ultimate determinant of service profitability?!

“…While some researchers seek to understand the link between employees’ fairness perceptions and service behaviors (e.g. Bettencourt and Brown, 1997), others explore the effects of customers’ fairness perceptions on trust and loyalty (Nguyen et al, 2014).…”

“…For instance, researchers explore whether customers who are treated fairly in their specific service encounter experience better service than unfairly treated customers (e.g. Nguyen et al, 2015), if these customers are more loyal than unfairly treated customers (Nguyen et al, 2014), or how fairness perceptions influence the acceptance of price increases (Xia et al, 2004).…”

Le chaînon manquant – l’équité comme déterminant ultime de la rentabilité des services ?!

“…Le construit d’équité, ainsi que sa relation à l’expérience du client et au comportement de l’employé, a récemment attiré de l’attention dans la littérature en marketing des services et en comportement organisationnel. Certains chercheurs tentent de comprendre le lien entre les perceptions d’équité des employés et leurs comportements en prestation de services (ex : Bettencourt et Brown, 1997), tandis que d’autres explorent les effets des perceptions d’équité des clients sur la confiance et la fidélité (Nguyen et al, 2014).…”