[We’re pleased to welcome Bettina Nyffenegger of the Institute of Marketing and Management at the University of Bern in Switzerland. Dr. Nyffenegger recently collaborated with Harley Krohmer, Wayne D. Hoyer, and Lucia Malaer on their article “Service Brand Relationship Quality: Hot or Cold?” from Journal of Service Research.]
Managers often have to decide whether their marketing activities should focus on improved services and functional features or on more emotional content to develop strong customer-brand relationships. That was a challenge that the Head of Marketing of a large European Airline was facing at the time we conducted a research project on brand relationship quality (BRQ), a customer-based indicator of the strength and depth of the person-brand relationship. Should emotions or quality-related, more functional aspects have more weight in the brand’s marketing campaign? How do they affect marketing performance (such as customer’s willingness to pay, word-of-mouth (WOM), consideration set, share-of-wallet, and revenue)? These were some of his questions that we tried to answer in our new research published in the Journal of Service Research (JSR).
Based on a large-scale survey among the frequent flyers of the Airline and objective performance data from the frequent flyer program, we show that service BRQ involves two components, “Cold” BRQ and “Hot” BRQ. We also find important and relevant distinction between the two in terms of both antecedents and consequences.
– “Cold” BRQ is based on object-relevant beliefs resulting in satisfaction and trust. It is characterized by a high confidence in and a positive evaluation of the service brand’s performance (i.e., it is tied to the quality of the service).
– “Hot” BRQ reflects consumers’ feelings and emotional connection to the brand. Longing for the brand, feelings of emotional closeness to the brand, and the intention to stay with the brand through good times and bad are crucial elements of the hot component.
Our results reveal that investments in both hot and cold BRQ have an economic impact by influencing customer behaviors. Thus, service providers should cultivate both the hot and cold BRQ of their customers, but for different reasons.
If the main objective is to grow revenues from the existing customer base (i.e., “internal” growth via a higher willingness to pay and a reduced consideration set size of existing customers), managers may want to focus on building hot BRQ with their customers. On the other hand, if their main objective is to expand the customer base by acquiring new customers (i.e., “external” growth via more intense WOM activities of existing customers), cold BRQ becomes more important.
More specifically, hot BRQ has been shown to have a stronger impact on customers’ willingness to pay. Thus, instead of lowering prices (e.g., when faced with high competition and heavy price cutting), it may pay off for service providers to focus on the emotional value they provide to customers and to build up hot BRQ. As an example, Starbucks customers are willing to pay a relatively high price for their coffee due to the emotional brand experience and connections.
In addition, hot BRQ is also more important for a reduced consideration of competitive brands. Thus, those service providers who can establish strong emotional ties with their customers achieve a sound protection from competitive threats and new competitors.
Cold BRQ better helps to attract new customers through positive WOM. While emotions may play an important role, for example, in viral marketing activities, customers need to be convinced about the quality and reliability of the service in order to recommend the service brand to others.
In addition, our research examined how such hot and cold consumer-service brand relationships can be developed. Our results suggest that to increase hot BRQ in early stages of consumer-brand relationships, managers should focus on enforcing consumer’s perception of the fit between his/her self and the brand’s personality (self-congruence). To create an emotional connection between new customers and the brand, managers should adopt a customer perspective in defining service brand personality. This means, for example that the design of the service environment, marketing communications, and behavior of frontline personnel have to create brand personality associations that foster similarity of perceptions with the customers.
In later stages of the relationship, managers should gradually develop the brand’s partner quality (i.e., whether the brand/company treats the customer well, shows interest in, and cares for him/her) in order to increase hot BRQ. Partner quality is also crucial for the build-up of cold BRQ – in early and even more in later stages of a consumer service-brand relationship. This illustrates the important role of a brand’s representatives. Caring and empathetic service experiences they create reduce uncertainty and increase confidence in the quality and reliability of the brand.
Bettina Nyffenegger is an Assistant Professor of Marketing at the Institute of Marketing and Management at the University of Bern in Switzerland. Her main research fields are branding, relationship marketing, and consumer behavior with articles published in journals such as the Journal of Marketing, Journal of the Academy of Marketing Science, and Journal of Service Research.
The article Service Brand Relationship Quality: Hot or Cold? featured in the post was co-authored by Bettina Nyffenegger, Harley Krohmer, Lucia Malaer (Institute of Marketing and Management, University of Bern, Bern, Switzerland), Wayne D. Hoyer (McCombs School of Business, The University of Texas at Austin). It is available ahead of print at Journal of Service Research website. Journal of Service Research is the world’s leading service research journal that features articles by service experts from both academia and business world.
Republished with permission. The original post was published on the Center for Services Leadership blog.