Who pays the price for loyalty? The role of self-consciousness

This paper aims to study the role of self-consciousness from the point of view of firm loyalty. Firms increasingly vie to gain, and then maintain, loyal consumers. A firm’s assumption that such consumers will be willing to pay premium prices, however, contradicts consumers’ rational motivations to seek low prices. This research suggests that consumers’ self-consciousness and the nature of their loyalty toward a firm help resolve this apparent contradiction. The results show that when past purchases reflect an exclusive relationship with a retailer, participants with high public self-consciousness valued relatively low-price offers, whereas those with high private self-consciousness expressed high-value perceptions for higher priced offers. However, when past purchases were divided between retail partners, self-consciousness showed no impact on value perceptions.

Firms increasingly vie to gain, and then maintain, loyal consumers. A firm’s assumption that such consumers will be willing to pay premium prices, however, contradicts consumers’ rational motivations to seek low prices. This research suggests that consumers’ self-consciousness and the nature of their loyalty toward a firm help resolve this apparent contradiction. The results show that when past purchases reflect an exclusive relationship with a retailer, participants with high public self-consciousness valued relatively low-price offers, whereas those with high private self-consciousness expressed high-value perceptions for higher priced offers. However, when past purchases were divided between retail partners, self-consciousness showed no impact on value perceptions.

Analysis reveals that consumers’ evaluations and search behaviors are influenced by characteristics of the medium (retail vs e-tail), but this effect is moderated by both gender and price knowledge. Females prefer a brick and mortar environment and are likely to seek information at such retailers even when similar products are available online. However, males evaluate online offers better than identical store offers and are less inclined to engage in channel transition. Finally, evaluations of online offers are positively related to price knowledge, whereas a reverse pattern of results is obtained for retail offers.

The findings shed light on how consumers evaluate identical online vs retail price offers, and their associated search intentions. These findings have practical implications for merchants who adopt a dual presence.