Richard G. Netemeyer

A Longitudinal Study of Complaining Customers' Evaluations of Multiple Service Failures and Recovery Efforts

The authors report a repeated measures field study that captures complaining customers perceptions of their overall satisfaction with the firm, likelihood of word-of-mouth recommendations, and repurchase intent during a 20-month span that includes two service failures and recovery attempts. The findings suggest that though satisfactory recoveries can produce a “recovery paradox” after one failure, they do not trigger such paradoxical increases after two failures. Furthermore, “double deviations” can occur following two consecutive unsatisfactory recoveries or following an unsatisfactory recovery in response to a second failure. The findings indicate that customers reporting an unsatisfactory recovery followed by a satisfactory recovery reported significantly higher ratings at the second postrecovery period than did customers reporting the opposite recovery sequence. The outcome of the second recovery also demonstrated a significant influence on customer ratings (positively if the recovery was satisfactory, negatively if the recovery was unsatisfactory), regardless of whether the customer found the first recovery satisfactory or unsatisfactory. In addition, although the increased change in recovery expectations and failure severity ratings from the first failure to the second is more dramatic for customers who previously reported a satisfactory recovery, the increase in attributions of blame toward the firm is more pronounced for customers who previously reported an unsatisfactory recovery. Last, the results show that recovery efforts are attenuated when two similar failures occur and when two failures happen in close time proximity.

Modeling customer perceptions of complaint handling over time: the effects of perceived justice on satisfaction and intent

Abstract This paper proposes a model of the effects of perceived justice on customer satisfaction and intent following a service or product failure and a recovery attempt. We tested the model using two field studies that captured customer perceptions over time, and the results largely support the model’s path estimates and explanatory power. Study One also supports the hypothesis that procedural and interactional justice are more influential in forming overall firm satisfaction than distributive justice. As hypothesized, satisfaction with recovery was a stronger predictor of the likelihood of spreading positive word-of-mouth (WOM intent) than overall firm satisfaction, and overall firm satisfaction was a stronger predictor of purchase intent than satisfaction with recovery. The results also suggest that satisfaction partially mediates the effects of justice on WOM intent and purchase intent. Finally, we draw on the findings of this study to offer implications for service recovery researchers and managers.

Developing and validating measures of facets of customer-based brand equity

Abstract This article presents four studies that develop measures of “core/primary” facets of customer-based brand equity (CBBE). Drawing from various CBBE frameworks, the facets chosen are perceived quality (PQ), perceived value for the cost (PVC), uniqueness, and the willingness to pay a price premium for a brand. Using numerous advocated scale developmental procedures, the measures of these facets showed evidence of internal consistency and validity over 16 different brands in six product categories. Results also suggest that PQ, PVC, and brand uniqueness are potential direct antecedents of the willingness to pay a price premium for a brand, and that willingness to pay a price premium is a potential direct antecedent of brand purchase behavior.

Firms Reap What They Sow: The Effects of Shared Values and Perceived Organizational Justice on Customers’ Evaluations of Complaint Handling

Employing elements of organizational theory and service recovery research, the authors examine how employees’ perceptions of shared values and organizational justice can stimulate customer-directed extra-role behaviors when handling complaints. They also investigate how these extra-role behaviors affect customers’ perceptions of justice, satisfaction, word of mouth, and purchase intent. The authors capture and match employee and customer perceptions regarding the relevant constructs following a complaint and recovery experience. The results indicate that employees’ perceptions of shared values and organizational justice affect customer-directed extra-role behaviors. Furthermore, the authors find that extra-role behaviors have significant effects on customers’ perceptions of justice and that these behaviors mediate the effects of shared values and organizational justice on customer justice perceptions. Their study reveals that customer ratings of justice affect the customer outcomes of satisfaction with recovery, overall firm satisfaction, purchase intent, and word of mouth. Finally, the authors show that customers’ perceptions of justice mediate the effects that extra-role behaviors have on customer outcomes.

Financial Literacy, Financial Education, and Downstream Financial Behaviors

Policy makers have embraced financial education as a necessary antidote to the increasing complexity of consumers financial decisions over the last generation. We conduct a meta-analysis of the relationship of financial literacy and of financial education to financial behaviors in 168 papers covering 201 prior studies. We find that interventions to improve financial literacy explain only 0.1% of the variance in financial behaviors studied, with weaker effects in low-income samples. Like other education, financial education decays over time; even large interventions with many hours of instruction have negligible effects on behavior 20 months or more from the time of intervention. Correlational studies that measure financial literacy find stronger associations with financial behaviors. We conduct three empirical studies, and we find that the partial effects of financial literacy diminish dramatically when one controls for psychological traits that have been omitted in prior research or when one uses an instrument for financial literacy to control for omitted variables. Financial education as studied to date has serious limitations that have been masked by the apparently larger effects in correlational studies. We envisage a reduced role for financial education that is not elaborated or acted upon soon afterward. We suggest a real but narrower role for “just-in-time” financial education tied to specific behaviors it intends to help. We conclude with a discussion of the characteristics of behaviors that might affect the policy makers mix of financial education, choice architecture, and regulation as tools to help consumer financial behavior. n nThis paper was accepted by Uri Gneezy, behavioral economics.

Conflicts in the Work-Family Interface: Links to Job Stress, Customer Service Employee Performance, and Customer Purchase Intent

Because customer service employees often represent the sole contact a customer has with a firm, it is important to examine job-related factors that affect customer service employee performance and customer evaluations. In two diverse customer settings, the authors capture matched responses from service employees, supervisors, and customers. The authors use the data to examine the potential chain of effects from customer service employee work–family conflict and family–work conflict, to job stress and job performance, to customer purchase intent (CPI). The results show direct (and indirect) effects of work–family conflict and family–work conflict on service employee customer-directed extra-role performance (CDERP). The results also show direct effects of job stress on service employee in-role performance (IRP) and CDERP and on CPI. Furthermore, the findings show that job stress has a more pronounced effect on IRP than on CDERP and that CDERP has a greater effect on CPI than does IRP. The authors conclude with a discussion of managerial and theoretical implications.

The Effects of Job Autonomy, Customer Demandingness, and Trait Competitiveness on Salesperson Learning, Self-Efficacy, and Performance

Although self-efficacy has been demonstrated to be positively associated with performance-related variables, few studies have looked at its possible antecedents in the context of personal selling. Applying social cognitive theory, this study posits that while self-efficacy positively affects performance, the salespersons learning effort directly affects self-efficacy. Furthermore, two task-related factors (perceived job autonomy and customer demandingness) and one individual difference variable (trait competitiveness) are proposed to affect salesperson learning effort and self-efficacy. Two empirical studies show consistent results regarding the positive effects of learning on efficacy and efficacy on performance as well as the influences of three exogenous constructs on learning and efficacy. Implications and future research directions are discussed.

A cross-national model of job-related outcomes of work role and family role variables: A retail sales context

This article proposes a model of job-related outcomes of four role variables in a retail sales context: work-family conflict (WFC), family-work conflict (FWC), work role conflict (RC), and work role ambiguity (RA). We tested the applicability of the model with three cross-national samples, that is, the United States, Puerto Rico, and Romania, and the results revealed that the models measures and effects are mostly similar across samples. It was also posited and mostly supported that the effects that WFC and FWC have on the job-related outcomes are greater than the effects of RC and RA. Implications concerning the effects of role variables for international retail managers are offered.

Salesperson creative performance: conceptualization, measurement, and nomological validity

Abstract To succeed in an era of increasing competition requires salespeople to engage in creative problem-solving activities. However, the contemporary sales literature has not explicitly examined the creative aspects of selling. Based on social psychological research on creativity and our own qualitative study, we conceptualize salesperson creative performance as the amount of new ideas generated or behaviors exhibited by the salesperson in performing his/her job activities . Following recommended steps in scale development, we develop a seven-item scale for measuring the construct that demonstrates acceptable unidimensionality, internal consistency, and construct validity. Implications and future research directions are discussed.

Attitude basis, certainty, and challenge alignment: A case of negative brand publicity

By integrating research from attitude challenge matching and consumer alignment and judgment revision, the authors explore how firms can position brands to insulate them from negative publicity and how consumers evaluate brands in reaction to such publicity. They introduce an important moderator of brand evaluation revision, prior brand attitude certainty, and propose that when negative publicity matches or “aligns” with the basis of a brand attitude, certainty in that attitude interacts with the attitude, determining the affect of the negative publicity on brand evaluations. The results of two experiments suggest that prior brand attitudes held with high certainty tend to “nsulate” brands, even when negative publicity matches or aligns with the bases of brand attitudes, whereas brand attitudes held with low certainty may exacerbate the effects of negative event publicity. The results also show that multiplex positioning (positioning a brand with both performance-and values-based attributes) may insulate brands more effectively from negative publicity.