Paul College associate professor of marketing Lin Guo has produced a novel study that focuses on customers’ relationships with their service providers. Many marketing managers simply assume customers always prefer a close, long-term relationship. The more the provider invests in the relationship, the thinking goes, the more the customer will feel “respect, gratitude and loyalty” that are the hallmarks of happy customers.
“But this isn’t necessarily so,” says Guo.
Customers have different “mental models” guiding their relationship expectations with the service provider. Some may prefer a close relationship; others simply want a reliable service and do not want to be involved in a relationship.
To understand the types of relationships that customers form with service providers, her recent study incorporated a new perspective — the psychological contract — into the relationship marketing field, revealing a unique relationship structure between consumers and their service providers that has not been clearly identified before. It explains why some relationship “overtures” by the service provider would never pay off.
Psychological contracts determine how individuals expect a service provider to treat them and how they would respond to a service providers’ relationship building effort.
“How friendly, responsive and personalized do you expect your provider to be?” says Guo. “How would you respond to a provider’s follow-up survey or phone call after each interaction?
To find answers, Guo and her co-authors analyzed a sample of 700 consumers across a variety of service industries, including financial, medical, travel, banking and airlines. From this sample, Guo identified four distinct types of psychological contracts — relational, standard, transitional and captive — that guide consumers’ relationship with their providers.
Relational contract customers prefer to bond with their service providers. They care about them and refer to them as friends. Standard contract customers are happy to keep things strictly business. Transitional contract customers are open for a change, becoming closer or not, depending on their satisfaction with their service and overall level of trust, and captive contract customers feel they have no other option.
Guo’s model allows her to tease out some surprising differences and similarities among consumers falling into different psychological contract types.
For example, says Guo, “If we look at customer loyalty behavior, we see that people who feel victimized or ‘captive’ by their service and confess to hating it continue to patronize it just as those do who view their service provider as a friend — but for very different reasons. They feel they have no other option!”
Service providers stand to benefit from understanding this sophisticated model as they strategize and allocate resources to bond with customers whose loyalty may or may not depend on costly and time-consuming bonding activities. “If a customer or client doesn’t answer your survey or attend an open house, maybe stop reaching out,” Guo says. “Many people just want good, dependable and reliable service.”
RECENT SELEC TED PUBLIC ATIONS
Dapena-Baron, M., Gruen, T., & Guo, L. (Forthcoming), Heart, head, and hand: a tripartite conceptualization, operationalization, and examination of brand loyalty. Journal of Brand Management.
Junzhou, Z., Chuanyi, T., & Guo, L. (2018). A longitudinal investigation of customer cooperation in services: the role of appraisal toward cooperation behaviors. Psychology and Marketing, 35.
Guo, L., Gruen, T., & Tang, C. (2017). Seeing relationships through the lens of psychological contracts: the structure of consumer service relationships. Journal of the Academy of Marketing Science, 45.