Longitudinal upgrades and asymmetric effects of satisfaction and perceived-value
ISSN: 0887-6045
Article publication date: 17 May 2022
Issue publication date: 23 March 2023
Abstract
Purpose
The purpose of this paper is to investigate how customers’ upgrading/downgrading (t−1) behavior may be predictive of future spending. Further, this paper also investigates how customers’ post-consumption evaluations of upgrades and downgrades [satisfaction(t−1) and perceived value(t−1)] may moderate the relationship between upgrades/downgrades and future spending.
Design/methodology/approach
The predictions are tested using a large longitudinal data set of river cruise purchases (N = 48,103) and largely replicated using a data set of zoo membership purchases (N = 2,469).
Findings
Satisfaction(t−1) mitigates the positive relationship between prior upgrades(t−1) and future spending(t). In contrast, perceived value(t−1) magnifies the positive relationship between prior upgrades(t−1) and future spending(t). However, no positively moderating effects are observed to alleviate the negative relationship between prior downgrades(t−1) and future spending(t).
Practical implications
This research suggests that managers should work hard early in customer–firm relationships because of an asymmetric difficultly in altering the trajectory of an established relationship. Specifically, relationships that are trending downward (as consecutive downgrades would suggest) are difficult to repair – a mechanism to alter this trajectory is not observed. In contrast, relationships that are trending upward (as consecutive upgrades would suggest) can be improved with high perceived value evaluations but also degraded with high satisfaction evaluations.
Originality/value
This research should recast marketers’ understanding of the value of customers’ upgrade and downgrade decisions. Instead of using customers’ upgrade or downgrade decisions as the dependent variable, or final outcome in buyer behavior, this study shows how the accumulation of prior upgrades and prior downgrades, over time, acts as a bellwether of the customer–firm relationship. Further, to the best of the authors’ knowledge, this study is the first to connect these upgrade/downgrade decisions to customers’ evaluations of those purchases to understand how individual purchases can impact the overall customer–firm relationship.
Keywords
Acknowledgements
The authors would like to thank Ruth N. Bolton and Elizabeth Howlett for their helpful feedback. This research received no external funding.
Citation
Miller, C.J., Sajtos, L., Lemon, K.N., Salas, J., Troncoza, M. and Ostrom, L. (2023), "Longitudinal upgrades and asymmetric effects of satisfaction and perceived-value", Journal of Services Marketing, Vol. 37 No. 4, pp. 478-495. https://doi.org/10.1108/JSM-12-2021-0475
Publisher
:Emerald Publishing Limited
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