Examining customer responses to preferential treatment
Preferential treatment is a common practice in service environments where only a few customers receive special benefits in addition to a firm’s core service, like priority boarding, access to exclusive events, and special discounts or offers. These benefits can be formally earned by customers through loyalty programs or given spontaneously by the service provider. (unearned).
The relationship marketing literature widely suggested that service providers can generate positive emotional and behavioural responses from customers, including positive behaviours, decreased price sensitivity, stronger patronage, more positive word-of-mouth, and increased purchase intentions, as preferential treatment fulfils the instinct human desire for status and distinction from others. However, potential negative effects can occur, such as customers’ concerns about negative judgement and retaliation from others, social discomfort, reduced service satisfaction, reduced feelings of fairness, and embarrassment. These negative emotions resulting from preferential treatment have been under-explored by previous research.
This research addresses the gap by examining (1) the consequences of receiving preferential treatment that violates ethics of care by causing harm to others, for example, a service delay, which in turn may trigger negative moral emotions in the advantaged customers; and (2) their attitudes towards the service provider with different types of preferential treatment (earned or unearned). The ethics of care approach posits that moral discomfort occurs when individuals fail to prioritise their social responsibility to care for others. Thus, drawing on this approach, the research proposes that customers perceive the reception of earned preferential treatment as violating their practical morality, which reduces their evaluation of moral self and invokes feelings of shame and avoidant coping mechanisms. Alternatively, receiving unearned
preferential treatment is perceived as equivalent to an accidental violation of social conventions that can invoke feelings of embarrassment
Method and sample
This research comprised 4 studies. The pilot study investigated customers’ awareness of the potential harms of their preferential treatment to other customers, through an online survey recruited on MTurk (N=209).
The next 3 studies were also online surveys on MTurk and involved experimental procedures to gain further insights. Study 1 (N=117) randomly assigned to participants 2 conditions of earned preferential treatment (through a loyalty program) with either lower or higher harm level to others. It measured participants’ attitudes toward the service provider, using three 7-point Likert scales, and the composite scores of shame, embarrassment, and guilt, using multiple 5-point scales.
Study 2 (N=170) measured participants’ coping mechanisms with their feelings of shame (with avoidance motivation) or guilt (with approach motivation), and their perceptions of harm caused to others because of their preferential treatment. This study utilised a similar scenario in Study 1 and another scenario to measure participant’s coping mechanisms.
Finally, Study 3 (N=121) exposed participants to randomly-assigned conditions of an unearned preferential treatment (automatically given for no particular reason) with either higher or lower harm to other customers, and measured the same constructs as Study 1.
Key findings
- The pilot study found that customers who are granted preferential treatment are aware that this may impose some harm or disadvantage to other customers, regardless of whether this special treatment is earned or unearned. This supports the idea that customers naturally scan the environment and observe others when judging their own experience.
- The three additional experiments show that perceived harm elicits negative moral emotions that influence advantaged customers’ attitudes towards the service provider. Study 1 found that in the context of an earned preferential treatment, higher perceived harm to others resulted in more negative attitudes toward the service provider, and this relationship is mediated by feelings of shame.
- Building on Study 1, results in Study 2 also show higher levels of shame experienced by advantaged customers exposed to the higher perceived harm condition, which led to more negative attitudes towards the service provider. Moreover, participants placed in the higher harm condition showed shame-induced coping mechanisms that align with avoidance motivations, which confirmed that shame was predominantly driving the effect of perceived harm on customer attitudes.
- Study 3 found that in the unearned preferential treatment context, advantaged customers’ mostly exhibited feelings of embarrassment, which influenced how high levels of perceived harm resulted in their negative attitudes toward the service provider. This is because embarrassment is triggered when one experiences a violation of social norms in an accidental or surprising situation, such as the receptionof unearned preferential treatment. In addition to feelings of embarrassment, advantaged customers are also likely to feel ashamed (external shame), as they feel like being judged by others. Not only can unearned preferential treatment result in temporary social discomfort (embarrassment), but it may also have consequences with longer-term effects (shame).
Recommendations
When utilising preferential treatment offerings in their relationship marketing strategy, firms should consider the fair and equitable treatment of all people (from the ethics of justice) and the holistic, contextual, and need-centred nature of such treatment (from the ethics of care). This ensures a variety of customers’ emotional reactions is anticipated and thus appropriately controlled.
Service providers should also consider if the preferential treatment is likely to be perceived as causing harm to others. Not only should they extend the benefits to loyal customers but also create the perception of ‘care’ being offered to all customers. In particular, firms should identify customer groups that need prioritisation and offer upper customisation for these customers while avoiding harms to others who are less responsive to such treatment. Firms should also encourage employees to scan the servicescape to identify if other customers’ needs should be attended to first, demonstrating the service providers’ goodwill and care for their customers.
Guidelines about the implementation of preferential treatment should be provided to employees to ensure transparency and empowerment are well-understood by employees. Employees should be adequately trained in providing clearer justifications when administering preferential treatment, especially unearned rewards. Emphasising the customer’s own effort in achieving the reward can also redirect their focus from ‘others’ to ‘self’ and trigger self-enhancing appraisal mechanisms.
To avoid eliciting shame or embarrassment, service providers could offer these benefits in more private settings. Providing customers with choices, for example, to transfer the benefits to others can also minimise harm and trigger positive feelings of pride and gratitude, which ultimately enhances their service experience.
