Journal Selections from MSI
The Dangers of Prioritizing Customers
Marketers need to encourage customer gratitude, but avoid creating feelings of entitlement.
Allocating resources to customers according to their importance can be a double-edged sword. In a study of German industrial good makers, Hauke Wetzel, Maik Hammerschmidt, and Alex Zablah show that customer prioritization generated feelings of gratitude which boosted profits, but also resulted in feelings of entitlement which reduced profits. Counterintuitively, being transparent with consumers about the details of the prioritization scheme led to more entitlement behavior and lower profits.
Being transparent about customer prioritization led to more entitlement behavior and lower profits.
A careful selection of tactics depending on context and underlying goals can minimize entitlement-driven customer behaviors while maximizing gratitude-driven customer behaviors, the authors write. Core benefit provision, for example, where a supplier's offerings closely match a customer’s needs, can uniformly encourage positive grateful behaviors without priming negative entitled behaviors.
Download article from American Marketing Association (free until October 31, 2014)
Gratitude Versus Entitlement: A Dual Process Model of the Profitability Implications of Customer Prioritization by Hauke A. Wetzel, Maik Hammerschmidt, and Alex R. Zablah, Journal of Marketing (March 2014)
Journal Selections from MSI (September 2014)
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