Abstract
Purpose - Customizing offers to match customers’ individual needs increases the firms’ attractiveness. This approach has, however, potential negative effects. Firms treating their customers differentially provoke unfairness perceptions from not being considered most important. While the literature discusses unfairness perceptions of pricing, promotion, and service, less is known about unfairness in customization practices. Our study addresses this gap by (a) developing a conceptual framework exploring the relationships between perceived negative firm customization, unfairness perceptions, and customer loyalty intentions, and (b) investigating the moderating effects of trust in these relationships.Design/methodology/approach - Using a survey approach, we collect 443 completed questionnaires. Following validation of our item measures, we conduct hierarchical linear regression analysis to test the conceptual model and hypothesized linkages between our constructs. Findings - The results demonstrate that customers’ negative perceptions of customization increase their unfairness perceptions. Unfairness perceptions drastically reduce customer loyalty intentions with trust acting as a significant moderator. Trust increases loyalty intentions even when unfairness perceptions are present. Our findings provide a foundation for understanding how firms may improve their perceived fairness. This increase in perceived fairness creates positive attributions, reduces negative customer experience perceptions, and increases loyalty intentions.Originality/value - Our key contribution is the development and validation of a conceptual model explaining the linkages between (a) firm customization and unfairness perceptions, (b) firm customization and customer loyalty intentions, and (c) the moderating role of trust between these relationships. Our study extends our understanding of how customization practices impact unfairness perceptions, and subsequently influences consumers’ perceptions, intentions, and behavior.
Purpose - Customizing offers to match customers’ individual needs increases the firms’ attractiveness. This approach has, however, potential negative effects. Firms treating their customers differentially provoke unfairness perceptions from not being considered most important. While the literature discusses unfairness perceptions of pricing, promotion, and service, less is known about unfairness in customization practices. Our study addresses this gap by (a) developing a conceptual framework exploring the relationships between perceived negative firm customization, unfairness perceptions, and customer loyalty intentions, and (b) investigating the moderating effects of trust in these relationships.Design/methodology/approach - Using a survey approach, we collect 443 completed questionnaires. Following validation of our item measures, we conduct hierarchical linear regression analysis to test the conceptual model and hypothesized linkages between our constructs. Findings - The results demonstrate that customers’ negative perceptions of customization increase their unfairness perceptions. Unfairness perceptions drastically reduce customer loyalty intentions with trust acting as a significant moderator. Trust increases loyalty intentions even when unfairness perceptions are present. Our findings provide a foundation for understanding how firms may improve their perceived fairness. This increase in perceived fairness creates positive attributions, reduces negative customer experience perceptions, and increases loyalty intentions.Originality/value - Our key contribution is the development and validation of a conceptual model explaining the linkages between (a) firm customization and unfairness perceptions, (b) firm customization and customer loyalty intentions, and (c) the moderating role of trust between these relationships. Our study extends our understanding of how customization practices impact unfairness perceptions, and subsequently influences consumers’ perceptions, intentions, and behavior.