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This paper aims to demonstrate both the positive and negative effects of loyalty programs. The study proposes a model to demonstrate why and how loyalty program strategies can result in good customer relationships and customer entitlement behaviors. Various configurations of three different loyalty program strategies are analyzed – tangible rewards, preferential treatment and perceived status.

The authors’ hypotheses were tested by analyzing the survey data of 152 frequent flyer program members in China through partial least squares-structural equation modeling. Fuzzy-set qualitative comparative analysis (fsQCA) was used to test different configurations of the three loyalty program strategies.

A net effects analysis demonstrates that loyalty programs are a double-edged sword. While loyalty programs can improve customer relationships, strategies based on perceived status have a positive relationship to customer entitlement, which may lead customers to expect extraordinary efforts from companies, such as greater discounts and extra privileges. Using fsQCA, the authors determined four sufficient configurations of high level of relationship quality and high level of customer entitlement, which also support their findings.

First, this study expands the research on loyalty programs by providing an examination of their positive and negative consequences. Second, by proposing the configuration paths that lead to high level of relationship quality and high level of customer entitlement using fsQCA, this research enriches research on the net effects of loyalty programs, providing researchers and practitioners with a more comprehensive understanding of loyalty programs. Third, this research extends the concept of customer entitlement to the context of buyer–seller relationships by introducing perceived status as an important antecedent of customer entitlement and by identifying four sufficient configurations.

Companies often provide preferential treatment, such as free upgrades, to customers. The present study aims to identify a costly consequence of such preferential treatment (i.e. opportunistic behavior) and reveal which type of customer is most likely to engage in that negative behavior (i.e. new customers).

Across two experimental studies, the authors test whether preferential treatment increases customers’ entitlement, which in turn increases their propensity to behave opportunistically. Moderated mediation analysis further tests whether that mediated effect is moderated by customers’ prior relationship with the company.

Preferential treatment increases feelings of entitlement, which consequently triggers customers’ opportunistic behaviors. New customers are more likely to feel entitled after preferential treatment than repeat customers, and hence new customers are more likely to behave opportunistically. Preferential treatment also increases customers’ suspicion of the company’s motives, but suspicion was unrelated to opportunistic behavior.

Future research may focus on other marketplace situations that trigger entitlement and explore whether multiple occurrences of preferential treatment provide different effects on consumers.

Present findings demonstrate that preferential treatment can evoke opportunistic behaviors among customers. The authors suggest that preferential treatment should be provided to customers who previously invested in their relationship with a company (i.e. repeat customers) rather than new customers.

Prior research has focused more on the ways companies prioritize their repeat customers than how they surprise their new customers. The present research instead examines preferential treatment based on customers’ relationship with a firm (i.e. both repeat and new customers) and demonstrates behavioral and contextual effects of entitlement.

While the positive effects of customer citizenship behavior are well established, research on its potential negative consequences is scarce. This study aims to examine the indirect relationship between customer citizenship and dysfunctional customers via customer moral credits and entitlement, as well as the moderating influence of customer citizenship fatigue.

Study 1 employed a cross-sectional design with a self-administered survey. The data were collected from 314 customers using an online research panel. In Study 2, the authors manipulated customer citizenship behavior using 203 participants to establish causality and rule out alternative explanations of the findings of Study 1. In Study 3, the authors replicated Study 2 and enhanced internal validity by using a more controlled experimental design using 128 participants.

This study shows that when customer citizenship fatigue is high, customer citizenship behavior elicits customer moral credit, which leads to customer entitlement and, in turn, promotes dysfunctional customer behavior. Conversely, when customer citizenship fatigue is low, customer citizenship behavior does not generate moral credit or entitlement, preventing dysfunctional customer behavior.

The study shows that promoting customer citizenship behavior does not always lead to positive outcomes. Therefore, when promoting customer citizenship behavior, managers should consider the psychological licensing process and ways to mitigate the influence of moral credits.

This study challenges common wisdom and investigates the dark side of customer citizenship behavior. Specifically, it demonstrates that customer citizenship behavior could backfire (e.g. dysfunctional customer behavior). It also shows that only customers who experience a high level of fatigue from their citizenship behaviors are psychologically licensed to gain moral credit, leading to dysfunctional customer behavior.

Status demotion in hierarchical loyalty programs (HLPs) has received considerable academic attention. However, little is known about whether status demotion engenders two widely recognised behavioural intentions: revenge and avoidance. This study aims to make up this gap by examining the effects of status demotion on customers’ revenge and avoidance intentions. The underlying mechanism and boundary conditions of these effects are also explored.

Two studies were conducted to test the hypotheses. Study 1 was conducted using a structured survey from 347 active HLP members/customers of Chinese airlines. Study 2 used an online experiment amongst 268 active HLP airline customers in Australia. Partial least squares-based structural equation modelling and Hayes’ (2013) PROCESS macro were used for data analysis.

The results of Study 1 show that status demotion increases customers’ revenge and avoidance intentions simultaneously. Meanwhile, these effects are more significant for demoted customers with an external locus of causality than those with an internal locus of causality and demoted customers with higher entitlement tend to possess more revenge intentions than avoidance intentions. Study 2 further identified perceived inequity as a mechanism, which links status demotion to revenge and avoidance intentions of demoted customers.

This study examines demoted customers’ revenge and avoidance intentions amongst Chinese and Australian airline travellers. Future research may focus on actual behaviour and test the current study’s model in cross-cultural and cross-industry settings.

Managers should deal with demotion decisions carefully as the failure to manage outraged customers may weaken customer-company relationships.

This study extends the existing literature on relationship marketing and HLPs by offering a better understanding of how and under what conditions status demotion elicits customers’ intentions for revenge and avoidance.

Consumers’ self-interests and personal goals in attaining collective goals are rarely considered in firm-hosted virtual communities (FHVCs). Based on working consumers paradigm and agency theory, the purpose of this paper is to investigate the joint impact of consumers’ psychological states of empowerment, engagement and entitlement on value cocreation behaviors in FHVCs.

US consumer panel data were used to test the proposed model on customers (n=338) participating in a FHVC.

The results show significant effects of the psychological states of empowerment, engagement and entitlement on value cocreation. Of these three states, psychological empowerment had the strongest effect. The predictive strength of entitlement for value cocreation is weaker for individuals with high knowledge of the community (KC). Practitioner interviews conducted with FHVC managers establish the states and set forth an emerging research agenda.

This study extends the cocreation literature to establish the holistic importance of psychological states as key antecedents of value cocreation for working consumers. It acknowledges agency motives and establishes KC as a moderating condition.

The explication of consumers’ psychological states has implications for the benchmarking and design of consumer portfolios.

This study advances the literature on cocreation by collectively examining three psychological states of consumers through the lens of working consumers paradigm and agency theory. It also establishes KC as an important boundary resource condition.

Customers can be territorial, which results in reactive behaviors that can hurt firm profitability. This study aims to expand the typology of customer territorial responses previously identified in the environmental psychology and marketing literature.

The authors use a mixture of quantitative and qualitative approaches. The exploratory studies elicit and test a typology of consumer territorial responses using critical incident technique and factor analysis. Two surveys use the typology. Study 1 examines intrusiveness in grocery store settings. Study 2 expands the model with specialty store shoppers to examine how rapport, employee greed, entitlement and time pressure interact with intrusion pressure and relate to customer territorial responses.

The results indicate a new category of territorial responses – deferential verbalizations – and show relationships between intrusion pressure and deferential actions, retaliatory verbalizations, retaliatory actions and abandonment. The relationships are affected by the moderators, including rapport, which interacts with intrusion pressure to increase the likelihood of switching.

Collecting data near closing time restricted observations and consumer time to participate using self-report data. The results should be replicated with other populations and service providers.

Managers should monitor customer treatment during closing time. The results indicate consumer responses to closing time cues not only impact their shopping trip but also affect whether they will patronize the store in the future.

The study provides an expanded typology of territorial responses, identifies moderating factors that may affect responses and links employee intrusiveness and territorial responses to store patronage.

This paper aims to investigate the effect of top management’s customer interactions (TMCI) on customer satisfaction. This study argues that TMCI’s overall relationship with customer satisfaction follows an inverted-U shape due to its positive and disruptive effects on the customer relationship efforts of frontline service/sales employees (FSEs). This paper further investigates the frontline competence of both FSEs and the top management team (TMT) as moderators of the impact of TMCI on customer satisfaction.

The conceptual model was tested empirically using data from managers, frontline employees and customers of microfinance firms. A multilevel structural equation modeling approach was used to test the hypothesized model.

The results show that TMCI has a curvilinear relationship with customer satisfaction. The results also show that frontline employees’ collective efficacy attenuates this relationship by shifting the turning point of the curvilinear effect to the right. Furthermore, TMT frontline competence amplifies both the positive and negative effects of TMCI on customer satisfaction.

This study advances knowledge on the effects of TMCI on customer satisfaction and highlights the nuanced relationship between top management involvement and indicators of firm performance.

The findings show the importance of considering the frontline competence of both top management and frontline employees when encouraging TMCI in organizations.

To the best of the author’s knowledge, this study is one of the first to examine TMCI’s direct impact on customer satisfaction and propose the frontline competence of both top management and frontline employees as boundary conditions on this relationship.

The purpose of this paper is to address what a sound warranty policy entails by identifying the key variables involved in the development of a warranty program.

The sample population was composed of employees in the US division involved with high‐tech product warranties. A survey questionnaire was used to collect data from the participants.

The paper finds that the formality of the warranty policy should depend on its complexity. Differences exist between types of warranty based on the product knowledge of the buyer. Although a standardized warranty is easy to administer, as the product line diversifies, it becomes more challenging to standardize.

This study can be expanded by examining how companies balance the cost/quality/warranty ability of the product, the techniques used to allocate warranty costs, and to evaluate multiple companies/industries, perhaps with a longitudinal focus.

The formality can be used to communicate the product warranty throughout the organization. Each department has a responsibility to the customer, so team members from service, product development, and marketing should plan and develop the warranty. A standardized warranty can send a clearer message to a customer about a firm's products. Simplifying front and back‐end processing and streamlining support structures can reduce costs.

In this paper, the identified key variable is brought out in warranty management framework. The development of this framework will satisfy a current, critical need to provide guidelines with all the steps needed to develop a warranty policy.

The purpose of this paper is to study what happens when firms misuse customers’ information and perceptions of unfairness arise because of privacy concerns. It explores a unifying theoretical framework of perceptions of unfairness, explained by the advantaged–disadvantaged (AD) continuum. It integrates the push, pull and mooring (PPM) model of migration for understanding the drivers of unfairness.

The paper is conceptual and develops a theoretical model based on extant research.

Using the PPM model, the paper explores the effects of information-based marketing tactics on the AD framework in the form of two types of customers. Findings from the review suggest that three variables have a leading direct effect on the AD customers. Traditionally, the fairness literature focuses on price, but findings show that service and communication variables impact customers’ unfairness perceptions. This paper examines the importance of these variables, in the context of an AD framework, to help explain unfairness and consider the implications.

To explain information misuse and unfairness perceptions, the paper develops a unifying theoretical framework of perceptions of unfairness, explained by linking the PPM model of migration with the AD continuum.

Given the importance of senior volunteers in an ageing society, this study aims to deepen the understanding of how seniors create well-being by volunteering as service providers in terms of motivations for volunteer participation and value co-creation/co-destruction in service provision.

Focussing on senior volunteers acting as service providers in the tourism sector, this study conducted a programme of qualitative research with 15 senior volunteer tour guides in Japan and the UK through the purposive sampling method. The data were analysed by the Gioia method to identify data structure and create a conceptual model.

Seniors start with a mixture of different motivations, not only symbolic and health ones. However, after a certain period of training, they become more aware of their volunteer role as service providers and may strive to maximise the benefits to their clients. The overall performance of such a role supports their well-being. They may also experience episodes of value co-destruction; such negative experiences may be overcome by building good relationships with their colleagues in the organisation.

The paper identifies organisational support ideas for senior service provider volunteers aimed at overcoming negative experiences and achieving well-being, in terms of training and improved communication between organisation members.

This study contributes to the transformative service research literature by constructing a model to showcase the relationship amongst expectations of volunteering as a service provider, service delivery and well-being creation. This paper also discusses the positive and negative effects of volunteer service delivery on senior volunteers' well-being.