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A neglected strategy of partial service termination and its impact on customers’ patronage

Author

Listed:
  • Mathieu Béal

    (EESC-GEM Grenoble Ecole de Management)

  • Caroline Bayart

    (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique, LSAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon)

  • Lecuyer Charlotte

    (LSAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon)

  • Denis Clot

Abstract

This research introduces the strategy of partial service termination (PST) and its consequences on customers' patronage. PST is a company's strategy where the company decides to stop providing a service while maintaining the relationship with the customer; it represents an in-between strategy between other investigated strategies, like service demotion and service termination. Using longitudinal and archival data from 26,464 clients of a large French insurance company, from 2014 to 2019, results show that PST exerts a negative effect on customers' patronage. Build on justice theory, we explain that customers tend to restore justice after a PST by terminating their other contracts with the company, in the vein of "an eye of an eye and a tooth for a tooth." Moreover, we find relationship length to play a protective effect here, as customers reduce less their patronage after a PST as their relationship is longer.

Suggested Citation

  • Mathieu Béal & Caroline Bayart & Lecuyer Charlotte & Denis Clot, 2022. "A neglected strategy of partial service termination and its impact on customers’ patronage," Grenoble Ecole de Management (Post-Print) hal-04919412, HAL.
    • Handle: RePEc:hal:gemptp:hal-04919412
    Note: View the original document on HAL open archive server: https://hal.science/hal-04919412v1
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    References listed on IDEAS

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    1. Mathieu Béal & William Sabadie & Yany Grégoire, 2019. "The effects of relationship length on customer profitability after a service recovery," Marketing Letters, Springer, vol. 30(3), pages 293-305, December.
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    5. Mathieu Béal & William Sabadie & Yany Grégoire, 2019. "The effects of relationship length on customer profitability after a service recovery," Post-Print halshs-02388613, HAL.
    6. Lepthien, Anke & Papies, Dominik & Clement, Michel & Melnyk, Valentyna, 2017. "The ugly side of customer management – Consumer reactions to firm-initiated contract terminations," International Journal of Research in Marketing, Elsevier, vol. 34(4), pages 829-850.
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