Assessing The Effects Of Service Variability On Consumer Confidence And Behavior

This research examines the effects of service variability on consumer confidence and behavior across multiple transactions in a service relationship. This article integrates discussions of service relationships and models of service variability. Leveraging a field study, the authors track over 12,000 experiences across 3,084 consumers for a 2-year period and model the impact of variability in these experiences on consumer relationships. The results reveal variability in a service relationship can significantly impact consumer confidence and that the nature of this relationship is nonlinear, revealing that small variations in quality will have strong effects on confidence and that these effects plateau as variability increases. Despite these overall effects, we also demonstrate that the positive benefits of service improvement strategies can offset these effects. Finally, in a second study, the results suggest firms can insulate themselves from the effects of variability by encouraging consumer involvement in relational investments (i.e., loyalty programs) that provide consumers with both interpersonal (i.e., status) and economic resources (i.e., points). Taken together, the results demonstrate that consumers integrate evaluations across transactions when evaluating a service provider, thus focusing on a single transaction, in isolation, may not accurately capture consumers' perceptions of the service relationship.