IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v55y2020ics0969698919312032.html
   My bibliography  Save this article

Weathering consumer pricing sensitivity: The importance of customer contact and personalized services in the financial services industry

Author

Listed:
  • Yun, Wonjoo
  • Hanson, Nicole

Abstract

In a low-cost switching environment, certain firm actions undertaken by service employees can improve consumer loyalty, satisfaction and reduce price sensitivity. Interestingly, consumers' satisfaction levels can actually increase when experiencing a price increase. Counterintuitively, when consumers experience a price decrease, their loyalty decreases, suggesting that it might be in the firm's best interest to not offer such pricing discounts as these customers may be hypersensitive to price. Overall, it appears much easier for service employees to positively influence customer satisfaction than customer loyalty; satisfied consumers do not necessarily become loyal consumers.

Suggested Citation

  • Yun, Wonjoo & Hanson, Nicole, 2020. "Weathering consumer pricing sensitivity: The importance of customer contact and personalized services in the financial services industry," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    • Handle: RePEc:eee:joreco:v:55:y:2020:i:c:s0969698919312032
    DOI: 10.1016/j.jretconser.2020.102085
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698919312032
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2020.102085?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ed Snape & Tom Redman, 2010. "HRM Practices, Organizational Citizenship Behaviour, and Performance: A Multi‐Level Analysis," Journal of Management Studies, Wiley Blackwell, vol. 47(7), pages 1219-1247, November.
    2. Eugene W. Anderson & Mary W. Sullivan, 1993. "The Antecedents and Consequences of Customer Satisfaction for Firms," Marketing Science, INFORMS, vol. 12(2), pages 125-143.
    3. van Dolen, Willemijn & de Ruyter, Ko & Lemmink, Jos, 2004. "An empirical assessment of the influence of customer emotions and contact employee performance on encounter and relationship satisfaction," Journal of Business Research, Elsevier, vol. 57(4), pages 437-444, April.
    4. Martin, William C. & Ponder, Nicole & Lueg, Jason E., 2009. "Price fairness perceptions and customer loyalty in a retail context," Journal of Business Research, Elsevier, vol. 62(6), pages 588-593, June.
    5. Ennew, Christine T. & Binks, Martin R., 1999. "Impact of Participative Service Relationships on Quality, Satisfaction and Retention: An Exploratory Study," Journal of Business Research, Elsevier, vol. 46(2), pages 121-132, October.
    6. Voorhees, Clay M. & Fombelle, Paul W. & Gregoire, Yany & Bone, Sterling & Gustafsson, Anders & Sousa, Rui & Walkowiak, Travis, 2017. "Service encounters, experiences and the customer journey: Defining the field and a call to expand our lens," Journal of Business Research, Elsevier, vol. 79(C), pages 269-280.
    7. Kasiri, Leila Agha & Guan Cheng, Kenny Teoh & Sambasivan, Murali & Sidin, Samsinar Md., 2017. "Integration of standardization and customization: Impact on service quality, customer satisfaction, and loyalty," Journal of Retailing and Consumer Services, Elsevier, vol. 35(C), pages 91-97.
    8. Jeffrey Dotson & Joseph Retzer & Greg Allenby, 2008. "Non-normal simultaneous regression models for customer linkage analysis," Quantitative Marketing and Economics (QME), Springer, vol. 6(3), pages 257-277, September.
    9. Jeffrey P. Dotson & Greg M. Allenby, 2010. "Investigating the Strategic Influence of Customer and Employee Satisfaction on Firm Financial Performance," Marketing Science, INFORMS, vol. 29(5), pages 895-908, 09-10.
    10. John G. Lynch , Jr. & Dan Ariely, 2000. "Wine Online: Search Costs Affect Competition on Price, Quality, and Distribution," Marketing Science, INFORMS, vol. 19(1), pages 83-103, April.
    11. Grissemann, Ursula S. & Stokburger-Sauer, Nicola E., 2012. "Customer co-creation of travel services: The role of company support and customer satisfaction with the co-creation performance," Tourism Management, Elsevier, vol. 33(6), pages 1483-1492.
    12. A. Colin Cameron & Pravin K. Trivedi, 2010. "Microeconometrics Using Stata, Revised Edition," Stata Press books, StataCorp LP, number musr, March.
    13. Garbarino, Ellen & Maxwell, Sarah, 2010. "Consumer response to norm-breaking pricing events in e-commerce," Journal of Business Research, Elsevier, vol. 63(9-10), pages 1066-1072, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sara Shafiee & Linda L. Zhang & Kourosh Marjani Rasmussen, 2024. "Improving Financial Literacy and Supporting Financial Decisions: Developing a Personalized Configurator," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 14256-14285, September.
    2. Kim, Hyunji & Schnall, Simone, 2021. "Profit for friends, fairness for strangers: Social distance reverses the endowment effect in proxy decision making," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    3. Asante, Daniel & Tang, Chunyong & Kwamega, Michael & Asante, Eric Adom, 2022. "In pursuit of service encounter quality: Will service-oriented high-performance work systems benefit high-contact service industries?," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    4. Raghavendra Prasanna Kumar & Arindam Banerjee & Zahran Al-Salti & S. Ananda, 2024. "Technology acceptance model and customer engagement: mediating role of customer satisfaction," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 1062-1076, September.
    5. Cai, Gangwei & Xu, Binyan & Lu, Feidong & Lu, Ye, 2023. "The promotion strategies and dynamic evaluation model of exhibition-driven sustainable tourism based on previous/prospective tourist satisfaction after COVID-19," Evaluation and Program Planning, Elsevier, vol. 101(C).
    6. Pradeep Kautish & Arpita Khare & Rajesh Sharma, 2022. "Health insurance policy renewal: an exploration of reputation, performance, and affect to understand customer inertia," Journal of Marketing Analytics, Palgrave Macmillan, vol. 10(3), pages 261-278, September.
    7. Sha Zhang & Xiting Wu & Yonggui Wang & Peiqi Jiang, 2024. "Does time of day affect consumers’ price sensitivity?," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    8. Shirie Pui Shan Ho & Amy Wong, 2023. "The role of customer personality in premium banking services," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(2), pages 285-305, June.
    9. Dhananjay Bapat & Devika Vashisht, 2024. "Experience in financial services: a bibliometric analysis and thematic content analysis," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 904-921, September.
    10. Tian, Xin & Zhu, Jiayi & Zhao, Xuan & Zhou, Xiaoyang, 2024. "Unveiling insights from online shopping carnivals: A pre-vs-post analysis," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tueanrat, Yanika & Papagiannidis, Savvas & Alamanos, Eleftherios, 2021. "A conceptual framework of the antecedents of customer journey satisfaction in omnichannel retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    2. Felicitas Evangelista & Maria Estela Varua & Vivienne Saverimuttu & Rina Datt & Hugh Pattinson & Karina Wardle & Anna Evangelista, 2022. "Antecedents and Outcomes of Service Co-Creation in the Sharing Economy," SAGE Open, , vol. 12(2), pages 21582440221, May.
    3. Bikram Jit Singh Mann & Sunpreet Kaur Sahni, 2011. "Inter-Relationship of Web Site Interactivity and Customer Outcomes," Global Business Review, International Management Institute, vol. 12(1), pages 99-115, February.
    4. Ajimon George & Jobin Sahadevan, 2019. "A Conceptual Framework of Antecedents of Service Loyalty in Health Care: Patients’ Perspective," IIM Kozhikode Society & Management Review, , vol. 8(1), pages 50-59, January.
    5. Hussam Al Halbusi & Pedro Jimenez Estevez & Tan Eleen & T. Ramayah & Md Uzir Hossain Uzir, 2020. "The Roles of The Physical Environment, Social Servicescape, Co-Created Value, and Customer Satisfaction in Determining Tourists’ Citizenship Behavior: Malaysian Cultural and Creative Industries," Sustainability, MDPI, vol. 12(8), pages 1-23, April.
    6. Noor Ul Hadi & Nadia Aslam & Amir Gulzar, 2019. "Sustainable Service Quality and Customer Loyalty: The Role of Customer Satisfaction and Switching Costs in the Pakistan Cellphone Industry," Sustainability, MDPI, vol. 11(8), pages 1-17, April.
    7. Steven M. Shugan, 2008. "Editorial—Introduction to the Special Classics Issue," Marketing Science, INFORMS, vol. 27(1), pages 9-11, 01-02.
    8. Fernandes, Teresa & Calamote, Ana, 2016. "Unfairness in consumer services: Outcomes of differential treatment of new and existing clients," Journal of Retailing and Consumer Services, Elsevier, vol. 28(C), pages 36-44.
    9. Hufnagel, Gerrit & Schwaiger, Manfred & Weritz, Louisa, 2022. "Seeking the perfect price: Consumer responses to personalized price discrimination in e-commerce," Journal of Business Research, Elsevier, vol. 143(C), pages 346-365.
    10. Caruelle, Delphine & Shams, Poja & Gustafsson, Anders & Lervik-Olsen, Line, 2024. "Emotional arousal in customer experience: A dynamic view," Journal of Business Research, Elsevier, vol. 170(C).
    11. Steven M. Shugan, 2006. "Editorial: Fifty Years of," Marketing Science, INFORMS, vol. 25(6), pages 551-555, 11-12.
    12. Keller, Alisa & Vogelsang, Mila & Totzek, Dirk, 2022. "How displaying price discounts can mitigate negative customer reactions to dynamic pricing," Journal of Business Research, Elsevier, vol. 148(C), pages 277-291.
    13. Yuanbin Xu & Yuchen Wang & Fucai Lu & Quan Xiao, 2023. "Toss a Peach and Get Back a Plum: Impact of Customized Services on Firm Performance," SAGE Open, , vol. 13(3), pages 21582440231, September.
    14. Bartschat, Maria & Cziehso, Gerrit & Hennig-Thurau, Thorsten, 2022. "Searching for word of mouth in the digital age: Determinants of consumers’ uses of face-to-face information, internet opinion sites, and social media," Journal of Business Research, Elsevier, vol. 141(C), pages 393-409.
    15. Anna Priester & Thomas Robbert & Stefan Roth, 2020. "A special price just for you: effects of personalized dynamic pricing on consumer fairness perceptions," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(2), pages 99-112, April.
    16. Fatima, Johra Kayeser & Di Mascio, Rita, 2018. "Reversing the dependency-trust relationship in B2C services," Journal of Retailing and Consumer Services, Elsevier, vol. 41(C), pages 1-10.
    17. Dobin Yim & Timothy Malefyt & Jiban Khuntia, 2021. "Is a picture worth a thousand views? Measuring the effects of travel photos on user engagement using deep learning algorithms," Electronic Markets, Springer;IIM University of St. Gallen, vol. 31(3), pages 619-637, September.
    18. Wamsler, Julia & Natter, Martin & Algesheimer, René, 2022. "Transitioning to dynamic prices: Should pricing authority remain with the company or be delegated to the service employees instead?," Journal of Business Research, Elsevier, vol. 139(C), pages 1476-1488.
    19. Hsiao, Chan & Lee, Yi-Hsuan & Chen, Wan-Jun, 2015. "The effect of servant leadership on customer value co-creation: A cross-level analysis of key mediating roles," Tourism Management, Elsevier, vol. 49(C), pages 45-57.
    20. Yi-Ching Hsieh & Hung-Chang Chiu & Yun-Chia Tang & Wei-Yun Lin, 2018. "Does Raising Value Co-creation Increase All Customers’ Happiness?," Journal of Business Ethics, Springer, vol. 152(4), pages 1053-1067, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:55:y:2020:i:c:s0969698919312032. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.