Bad service doesn’t deter customers, research finds

Customers who get bad service actually may be more likely to return to a business — if the customer expected poor service in the first place, a UW–Madison researcher has found.

Some commonly held beliefs about the way that customers perceive quality and act on their perceptions are simply wrong. J. Jeffrey Inman School of Business

This surprising conclusion and others are suggested by research published in a journal of the Institute for Operations Research and the Management Sciences, an international scientific society. J. Jeffrey Inman, an associate professor in the School of Business, was one of four scholars who published the study.

“These are counterintuitive findings,” Inman says. “Some commonly held beliefs about the way that customers perceive quality and act on their perceptions are simply wrong.”

The researchers conclude that:

• Businesses need not exceed customer expectations to increase customer preference for their offerings.
• Expecting — and getting — poor service does not reduce customer preference for a product.
• Customers may rationally choose a brand that they expect to be of poor quality, even if all non-quality attributes are equal.
• Paying more attention to loyal, experienced customers can sometimes be counterproductive.

These findings hold important implications for the way companies introduce and market their products, Inman and the other authors say.

For example, companies introducing a new product might want to spend more money on coupons, promotions, and other ways to induce customers to try the new product, the authors say.

Because loyal customers are less likely to switch to another brand, the authors suggest that management should pay more attention instead to newer, presumably less loyal customers. Quality differences will have a bigger impact on buying decisions by those customers. Because of this effect, the authors recommend that customer satisfaction surveys include a question about the customer’s experience with a product.

Authors used two behavioral experiments to arrive at their findings:

• In the first experiment, 160 undergraduate participated in a computerized decision-making exercise. During the exercise, students received a series of experiences that would help them develop preferences from among three brands of camera batteries.
• In a second experiment, 223 students participated. After being exposed to as many as 20 experiences at a coffee shop, the subjects were asked to describe the consistency of shop service.

Inman says the researchers don’t believe that their results would be different had they used a different demographic group for the experiments.

The other authors of “What You Don’t Know About Customer-Perceived Quality: The Role of Customer Expectations” are Roland Rust of the Owen Graduate School of Management at Vanderbilt University in Nashville; Jianmin Jia, Chinese University of Hong Kong; and Anthony Zahorik, AC Nielsen Burke Institute.

The study appears in the current issue of Marketing Science. The Institute for Operations Research and the Management Sciences is a 12,000-member international scientific society dedicated to applying scientific methods to help improve decision-making, management, and operations.