Executive summary of "Customers helping customers: payoffs for linking customers

Citation

(2014), "Executive summary of "Customers helping customers: payoffs for linking customers", Journal of Services Marketing, Vol. 28 No. 5. https://doi.org/10.1108/JSM-06-2014-0220

Executive summary of "Customers helping customers: payoffs for linking customers"

Article Type: Executive summary and implications for managers and executives From: Journal of Services Marketing, Volume 28, Issue 5

This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.

In addition to its machines and personal trainers, a gym had a refreshment bar where members could get a free drink, a complimentary newspaper and could sit down and have a chat. Many friendships were made there, some long-lasting. If someone was doing a crossword puzzle, other gym members might pitch in with an answer. No one need ever feel alone. When the time for membership renewals came, few of the members who enjoyed the camaraderie of the coffee lounge would never consider letting their membership lapse or going elsewhere. Why would they?

Eventually, the gym’s somewhat out-of-touch management – it was part of a huge chain of health centers – decided to economize by doing away with the coffee bar, drinks and newspapers. Despite the exhortations of the local management who knew every customers’ name and also the value of the little refreshment bar haven, the number crunchers did save on the tea, coffee and newspaper supplies, but gym membership dwindled dramatically. What the top brass failed to realize was that it was not just a case of customers buying a service. Customers enjoyed the presence of other customers. Customer-to-customer interactions allow consumers to enjoy superior consumption encounters and, ultimately, to be more satisfied patrons who spend more.

This notion of social support is not surprising to those who study the service industries. Such exchanges among customers strengthen their perceptions of belonging. In "Customers helping customers: payoffs for linking customers", Dr Hulda G. Black et al. define intercustomer support as the customers’ perceptions of the resources they receive from other customers within the service setting that result in feelings of belonging and enrich the service experience. Interactions with other customers generate positive outcomes for customers and the service firms, the latter getting the benefits of loyalty. Co-creation of value occurs when the customer contributes to the creation of the service offering in this way.

Customer ties can be categorized as either being strong or weak. Strong ties are associated with frequent communication that lead to higher levels of trust and effective transfer of ideas and information. Weak ties are less demanding with respect to the resources required to maintain the relationship or connection, yet the type of information that can be effectively communicated is generally less complex than can occur via strong ties.

The study found that intercustomer support is a powerful resource that can be managed for competitive advantage. Through connections with other customers, individuals acquire both instrumental (practical help and assistance) and social/emotional (companionship and emotional outlet) support. This understanding is critical for managers looking to foster a service environment where customers support each other.

Intercustomer support by nature is derived from connections among customers within the same network. It, therefore, follows that a customer’s network within the service setting will be an important determinant of the level of intercustomer support they perceive. As customers who are connected share information, they acquire new knowledge and skills and discover novel opportunities for enriching their service experiences. For intercustomer support to exist, a customer must have connections with other customers. Without these connections, they would be unable to perceive available resources. On the other hand, the existence of these ties does not necessarily signify that resources flow across these linkages. For example, two church members may share the same pew every Sunday yet never exchange more than passing the offering plate. Intercustomer support requires that customers must be connected, and resources must flow between them. Therefore, customer ties are a necessary, but insufficient, condition for intercustomer support.

Managers do not have to invest significant resources to foster only strong connections among customers or promote intense amounts of emotional exchange among each other. Simply connecting customers (i.e. providing an environment where even limited communication can occur) has significant payoffs with respect to instrumental intercustomer social support, which has financial payoffs for the firm. It is within management’s means to foster intercustomer support and thereby enhance organizational performance through increased customer spending and referrals.

Managers (the study has implications for all relationship-based service settings, including, but not limited to, health clubs, country clubs or places of worship) should be encouraged to develop programs and foster environments that lead to more customer-to-customer linkages and more communication between them. Social media is also an appropriate mechanism for encouraging interactions. Managers can also design the physical setting to encourage customer interaction. For instance, coffee shops and bookstores can arrange their seating to encourage conversational groupings.

Children’s events or group fitness classes would not only bring members together, but also connect those who share similar interests, thereby enhancing customer-to-customer connections. By encouraging customers to connect to an increasing number of other customers, firms will not only reap the benefits of increased instrumental support among customers, but there will also be an increase in the social/emotional support among customers that results from a larger network.

To read the full article enter 10.1108/JSM-12-2012-0252 into your search engine.

(A précis of the article "Customers helping customers: payoffs for linking customers". Supplied by Marketing Consultants for Emerald.)