The Impact of Customers’ Perception of Varying Degrees of Customer Service on Commitment and Perceived Relative Attractiveness By Tor W. Andreassen* and Line

Business response to customers’ need for service (before, during, and after purchase) is mixed –from investing significantly to not investing at all or even to de-investing – indicating an ambiguity regarding customer service’s impact on performance. In this paper we test the impact of god and bad customer service on key business variables such as customer satisfaction, perceived relative attractiveness, and commitment. Our point of departure is in keeping with business’ ambiguity, i.e. there are no differences in key business variables between the impacts of good or bad customer service. Based on the theoretical model, and on data sampled and analyzed we conclude that there are significant differences between customer responses to good and bad customer service. Customers experiencing good customer service are more satisfied, perceive the firm to be relatively more attractive in the market, and are more affectively than calculatively committed to the firm. From these findings, service managers can learn that investing in customer service is “the right thing to do” as customer service is linked to variations in commitment to the firm and thus future revenues. Good customer service stimulates an affective commitment (i.e. warmer) to the firm by making it more attractive in the market and by generating higher levels of customer satisfaction. From this perspective, good customer service is a contributor to customer equity.