Because You'Re Worth It a Study of the Consumer Status Concept

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Recherche et Applications en Marketing

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DOI: 10.1177/205157071002500401

2010 25: 7Recherche et Applications en Marketing (English Edition)William Sabadie

Because You're Worth It: A Study of the Consumer Status Concept

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Researchers and marketing professionals propose

placing the customer at the heart of the firms preoc-

cupations. From a historical perspective, the place

occupied by the customer has grown with increasedmarket competition, more consumer information and

pressure from consumer movements (Cochoy, 1999,

2002; Ughetto, 2002). Thus, customers could believe

that firms do everything in their power to avoid

disappointment and enchant consumers day after day

(Firat and Venkatesh, 1995). This feeling is reinfor-

ced by corporate advertising. Schwarzkopf knows

that every woman wants to be treated like a queen

and LOral systematically reminds us that were

worth it.Recognizing the existence of customer status

means believing a firm has certain obligations toward

the latter (Sarbin and Allen, 1968). In addition, this

status entails behavioral standards such as considera-

tion (Sahlins, 1972). Yet, in practice, we can see that

satisfying all customers is not an end in itself: in

Recherche et Applications en Marketing, vol. 25, n 4/2010

Because Youre Worth It:

A Study of the Consumer Status Concept

William Sabadie

Professor

Universit de Lyon

CoActiS

The author wishes to thank Sonia Capelli for her sound advice and invaluable support.He can be reached at the following e-mail address: [email protected]

RESEARCH

ABSTRACT

Relationship marketing is built on the reciprocity principle: companies offer special treatment and rewards to their customers

in order to encourage a better relationship. This study examines the impact of these efforts (staff attention and privileged

offers) as symbols of the customers position within the hierarchy established by the company. After defining and measuring the

Customer Status Concept within the context of the cell phone industry, the results are used to demonstrate, with a population of

gym club users, the influence of perceived status on the quality of customer relationships.

Keywords: Status, customer relationship, loyalty.


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order to maximize profits, it is sometimes preferable to

concentrate on pleasing certain customers. Customer

equity management is based on an economic concep-

tion: the firm is willing to make an effort, but only

for customers who are worth the trouble. This means

abandoning certain customers, as well as calculating

and supporting the cost of their disappointment

(Wagner, Hennig-Thurau and Rudolph, 2009).

Consequently, marketing principles require the firm

to rank its customers according to importance,

understood here as the real or potential profits they

represent. Ranking is used to define the nature and

level of efforts granted to earn the loyalty of each

customer. Also, the principle of reciprocity requires

that customers be aware of the efforts made by the

firm in order to reward it in turn through their pur-

chases (Bagozzi, 1995). For example, the telecomfirm Orange explains this mechanism on its French

website: Today, placing your trust in us is even

more rewarding: collect points and win numerous

prizes in return for your loyalty to Orange. Thus,

studies conducted in the field of relationship marketing

show that the firms efforts, special attention and per-

sonalized services, for example, positively influence

the quality of its relationship with customers

(Hennig-Thurau et al., 2002; Palmatier et al., 2006).

A large number of studies show that investments in

relations increase consumer trust and commitment,

which in turn influence consumer attitudes and there-

fore the firms performance (Garbarino and Johnson,

1999; Morgan and Hunt, 1994; Sirdeshmukh, Singh

and Sabol, 2002). However, Palmatier et al. (2006)

demonstrate, through a meta-analysis, that invest-

ments in relations can also influence the firms per-

formance directly. These results encourage further

research in order to discover new variables involved in

the process that links the firms efforts to influence

relationships and its performance. Thus, Palmatier et

al. (2009) show that the consumers feeling of grati-

tude is a mediating variable that contributes to theprocess. Similarly, this article proposes that an indivi-

duals perception of his position in the customer ran-

king system also plays a role. This ranking system is

sometimes clearly expressed by the firm (Visa

Premier and Gold Card status in the banking sector, for

example). In this case, Drze and Nunes (2009) have

shown that position in the customer ranking system, or

status, influences whether customers feel they are

special. They show that an increase in the number of

privileged customers in the highest strata dilutes the

perception of special status, while adding a lower

level reinforces this perception. However, to our

knowledge there have been no studies of the indivi-

duals perceptions of his rank when customer status

is not clearly indicated by the firm. Yet, the nature

and degree of effort, even the absence of effort,

should provide clues that the customer can use to

judge how he is considered by the firm.

This is why this study examines how customers

interpret marketing initiatives designed to influence

them in order to determine their status, or the customer

status concept (CSC). The main goal is to test the

mediating role of the CSC on the link between rela-

tionship building efforts on the part of the firm and

customer attitudes.

This article comprises three parts. First, we pre-

sent the fundamentals of the CSC. Second, we pro-pose a research model in order to understand the

antecedents and consequences of the CSC. Third, we

present the results of a study designed to construct a

measurement tool for the CSC and test our research

hypotheses with cell phone and gym club customers.

The results show the role of the CSC as a mediating

variable in the relationship between the companys

efforts (special treatment and privileges) and the qua-

lity of the relationship.

THE CUSTOMER STATUS CONCEPT (CSC)

Consumer experiences offer an opportunity for

customers to evaluate how they are considered by a

firm. For example, privileges granted under a loyalty

program or how problems are handled serve as sym-

bols of customer importance. Thus, Drze and Nunes(2009) have shown how the hierarchical structure of a

loyalty program, i.e., the number of levels and the

number of customers in each class, influences the

customers perception of his special status. Wagner,

Hennig-Thurau and Rudolph (2009) observe that a

customers demotion has a greater influence on

loyalty than promotion to a higher level. In a B-to-B

context, Ivens and Pardo (2004) show that the

impression of being an important customer positively

influences intentions to pursue the relationship. More

William Sabadie8


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generally, the more special the customer feels the

more loyal he will be (Frankwick, Porter and Crosby,

2001) and the more he will recommend the firm

(Price and Arnould, 1999). These studies underline

the role of the customers position in the firms explicitranking system.

It is therefore important to specify the mecha-

nisms likely to explain the role of the CSC and to

define the concept.

The fundamentals of customer ranking

Marketing recognizes the interest of ranking cus-

tomers for two reasons: the customers profitability

and expectations of uniqueness. First, current and

future levels of a customers spending incite the firm to

make more or less of an effort to reward him.

According to contemporary exchange theory (Blau,

1963), both parties consider their costs and benefits.

Adams equity theory (1965) shows that feelings of

fairness result from the principle of internal equity:

the balance between costs and rewards. Customer

rewards consist, particularly, in all efforts granted by

the service provider (for example, personalized ser-

vice). According to the principle of external equity,

the customers impression of fairness also results

from comparing his own cost/reward ratio with thatof other customers.

Second, ranking is a way of meeting individual

needs for uniqueness and superiority. The relational

approach to exchanges (e.g., MacNeil, 1980) consi-

ders benefits to be more identity-related and emotional.

Brewer (1991) suggests that the individuals quest for

social identity aims to satisfy, simultaneously, the

need for assimilation and differentiation. On the one

hand, we must consider the customers need for the

service provider to comply with behaviors inherent in

the customer/supplier role-play (courtesy, forexample). Thus, Gwinner, Gremler and Bitner (1998)

emphasize the importance of recognition, which is

understood as a sign of respect and membership in a

specific social group, to explain customer loyalty.

Respect is a key variable in relational exchanges. The

term respect denotes both a positive feeling of

esteem for a person and specific actions and conduct

representative of that esteem. It is therefore both a

condition for the transaction to take place and a

means for the parties to assess how they are valued

(Pharo, 2001). In the organizational sphere, Lind and

Tyler (1988) and Tyler and Lind (1992) underline the

importance of feelings of consideration and respect

for others. According to Folger and Cropanzano

(1998), people desire to be valued and esteemed byothers [...]. Among other things, this would include a

sense of dignity and the respect of ones peers.

On the other hand, the firm must consider the

need to differentiate customers (Snyder and Fromkin,

1980). Social comparison theory (Festinger, 1954)

suggests that individuals evaluate their own abilities by

comparing themselves to others. People need to

believe they are superior to others (Taylor and

Brown, 1988), and comparisons with less privileged

individuals can increase self-esteem (Wills, 1981).

Leary et al. (1995) define self-esteem as the feeling of

being accepted or rejected by the other party of atransaction. In the context of commercial relations,

privileges must be perceived by the customer as sym-

bols of his importance for the service provider.

Brocks commodity theory deals with the psycholo-

gical effects of scarcity. In this context, exclusive

offers are valued more because possessing rare com-

modities provides feelings of personal distinction or an

impression of uniqueness (Brock, 1968).

Definition of status

Chappuis and Thomas (1995) define status as a

position within a hierarchy fostered by a given social

group that implies specific behaviors and roles. Each

party knows how to act according to the status and

behavior of the other party and vice versa (Solomon et

al., 1985; Sahlins, 1972). In the field of marketing,

customer ranking is based on segmentation accor-

ding to the value of each customer for the firm. Also, it

is the firms efforts that allow the customer to appre-

ciate the value he has in the eyes of the firm and hisposition within this hierarchy. He can base his judg-

ment on the reciprocity principle, according to which

loyal customers are rewarded by efforts on the part of

the firm (Anderson and Weitz, 1992; Ganesan, 1994;

Huppertz, Arenson and Richard, 1978; Houston and

Gassenheimer, 1987; Bagozzi, 1995; Palmatier et al.,

2006).

The CSC is defined in this study as the indivi-

duals perception of his position within the firms

customer ranking system; this position is reflected

Because Youre Worth It: A Study of the Consumer Status Concept 9


5/18

in the level of consideration granted to him due to

his value.

Status is therefore not envisaged as membership

of a formal category defined by the firm, as in the

work of Drze and Nunes (2009) and Wagner,Hennig-Thurau and Rudolph (2009). Instead, it is the

customers perception, based on the service provi-

ders efforts. These efforts are symbols of the custo-

mers importance. The latter interprets the firms

actions in order to define his place in the customer

hierarchy.

THE MEDIATING ROLE OF THE CSC

The object of this article is to examine the media-

ting role of the CSC between the firms efforts and

the quality of the relationship. A mediator is a

variable that is used to explain the process by which

one variable influences another (Chumpitaz and

Vanhamme, 2003). We want to know to what extent

the CSC can contribute to explaining the process by

which the relational efforts of the service providerare effective, or not. In other words, a share of the

influence of the firms efforts on the quality of the

relationship should involve the CSC. Studying the

quality of the relationship as a variable predicted by

the efforts of the service provider is consistent with

studies conducted in the field of relationship marketing

(Palmatier et al., 2006). The quality of the relation-

ship can be considered a global judgment of the rela-

tionships strength (Garbarino and Johnson, 1999).

Some studies consider quality to be a multi-dimen-

sional concept (e.g., Kumar, Scheer and Steenkamp,

1995). While debate persists as to the exact number of

dimensions, a consensus has been reached concer-

ning the importance of satisfaction, commitment and

trust. Thus, a higher quality relationship should go

hand in hand with a higher level of satisfaction and

loyalty intention. In this study, the quality of the rela-

tionship is understood mainly through its conse-

quences: word-of-mouth intention, loyalty intention

and satisfaction. There are several reasons that justify

the choice of an aggregate concept of relationship

quality rather than a separate study of each of its

dimensions. First, the concepts of satisfaction,

loyalty intention and recommendation intention are

generally highly correlated (Appendix A2) and have

been aggregated in previous studies (e.g., De Wulf,Odekerken-Schrder and Iacobucci, 2001). Second,

the validity of the quality-satisfaction-repeat pur-

chase intention-profit causal chain has been demons-

trated in various theoretical and empirical studies

(Anderson, Fornell and Lehmann, 1994; Rust,

Zahorik and Keiningham, 1995; Hennig-Thurau,

Gwinner and Gremler, 2002) and is not the object of

this study. Third, while the concepts are distinct,

respondents have difficulty differentiating them and

tend to consider them in the same way (Crosby,

Evans and Cowles, 1990). Finally, trust was not

selected as an indicator of relationship quality

because we preferred to use this concept to characte-

rize the credibility of the service providers loyalty

building efforts. Indeed, according to the reciprocity

principle, the consumer is under psychological pres-

sure to reward the efforts of the firm in order to avoid

feelings of guilt (Becker, 1986; Dahl, Honea and

Manchanda, 2005). Yet, the efficiency of investments

in relationships depends on the motivations the

consumer attributes to the firm (Palmatier et al.,

2009). Trust, particularly its moral dimension, is

based on a mechanism for attributing qualities, cha-racteristics and/or intentions to a partner. Thus, inte-

grity involves attributing genuine motivations to a

brand in terms of keeping its promises concerning

the conditions of the transaction, in other words the

honesty of its discourse in general (Gurviez and

Korchia, 2002, p. 47). Trust is therefore viewed as

moderating the influence of the firms efforts on cus-

tomer attitudes. It cannot be considered an endoge-

nous variable.

Two types of antecedents are distinguished,

according to whether the firms efforts aim to show

consideration for the customer within a

customer/corporate relationship (non-exclusive per-

sonalization) or within a customer/customer relation-

ship (exclusive personalization). Non-exclusive per-

sonalization concerns the attention granted by the

firm to each of its customers. The firm does not distin-

guish a particular customer from others, but demons-

trates its interest in satisfying his expectations.

Exclusive personalization consists, on the contrary,

in the firm making special efforts to demonstrate the

William Sabadie10


6/18

importance of a particular customer compared to

others.

Non-exclusive personalization

Non-exclusive personalization covers different

notions such as individualized and adapted offers or

special attention of staff (Salerno, 2005). In a B-to-B

context, Frankwick, Porter and Crosby (2001)

demonstrate that the level of attention granted by a

salesperson (responses to expectations or complaints,

for example) is correlated with the level of the CSC.

The authors propose a research protocol designed to

link perceived customer status with real efforts by the

firm. They use the concept of salesperson-customer

relationship status, supported by a categorical mea-

sure, to characterize the strength of ties between the

two parties. Thus, top ranking customers are in

contact with a salesperson capable of making customer

policy decisions and advising them without referring to

a supervisor. Customers ranked in second place are

in contact with a dedicated salesperson, but who can-

not make decisions about customer policy. On the

third level, customers are not in contact with a dedica-

ted salesperson and sales staff is not involved in defi-

ning customer strategies. Finally, orphan custo-

mers do not have relations with sales staff. Researchon service quality also shows the influence of inter-

personal relations, and in particular attention granted to

customers, on satisfaction. The understanding

dimension refers to the level of consideration and

individual attention granted and efforts made by the

firm to understand consumers (Parasuraman,

Zeithaml and Berry, 1985). This is why our first

research hypothesis postulates that the attention cus-

tomers receive positively influences the CSC.

H1: The CSC mediates the link between attention

granted to the customer and the quality ofthe relationship.

Exclusive personalization

According to Sheth and Parvatiyar (1995), rela-

tionship marketing is based specifically on the

consumers need for differentiation. Salerno (2001)

emphasizes that the notion of exclusiveness covers

several similar aspects: privileged service, special

treatment, exceptional attention, perks, unexpected

attention and services not available for others

(Bhattacharya, Rao and Glynn, 1995; Berry, 1995;

Gwinner, Gremler and Bitner, 1998). Preferentialtreatment is defined as a consumers perception of

the extent to which a retailer treats and serves its

regular customers better than its nonregular custo-

mers (Gwinner, Gremler and Bitner, 1998; De Wulf et

al., 2001). In the service sector, Bitner, Booms and

Tetreault (1990) and Price, Arnould and Tierney

(1995) show that special attention and small perks

are an important determinant in satisfaction and

memorable experiences. In France, Salerno (2005)

and Collin-Lachaud and Sueur (2008) show that spe-

cial attention influences customer satisfaction in ban-

king and retailing, respectively.

H2: The CSC mediates the link between the per-

ception of benefiting from privileges and the

quality of the relationship.

The links described above are summarized in

Figure 1.

Previous studies present perceived sincerity of

advertising as a key element in consumer apprecia-

tion (Speed and Thompson, 2000; Goldsmith,

Lafferty and Newell, 2000; De Pechpeyrou, Parguel

and Desmet, 2006). Sincerity is presented as adimension of perceived credibility (Eisend, 2006).

The customer feels that the service provider is not

trying to deceive him. Indeed, customers formulate

judgments concerning the service providers motives

(Friestad and Wright, 1994). Thus, Boulaire (2003)

demonstrates that birthday cards sent by firms are

sometimes perceived as calculated gestures designed to

create a feeling of indebtedness. Sincerity of the

firms intentions therefore seems to be a condition

for effective marketing initiatives (De Pechpeyrou,

Parguel and Desmet, 2006). In questioning the since-rity of the offer, the consumer can consider that he is

not really valued, but merely reaping the benefits of the

relationship. For example, text messages sent by cell

phone carriers promoting special offers for loyal cus-

tomers are often perceived as mass marketing initia-

tives. Therefore, they do not contribute to a feeling of

differentiation for the consumer. The service provi-

ders efforts to improve the quality of the relationship

will only be effective if they are perceived as sincere.



7/18

H3: The more the service providers initiatives

are perceived as sincere, the more attention

granted to the customer positively influences

his perceived status.


are perceived as sincere, the more the per-ception of benefitting from special privileges

positively influences the customers percei-

ved status.


are perceived as sincere, the more the custo-

mers perceived status positively influences

the quality of the relationship.

RESEARCH METHODOLOGY AND RESULTS

Fields of study

An exploratory study, alternating qualitative

interviews and investigations, was conducted in the

cell phone sector. Most customers subscribe for per-

iods of 12 to 24 months. This relationship is there-fore highly representative of the reciprocity principle

since carriers make considerable efforts to attract

new customers and establish a long-term relationship

in order to recover the cost of these investments.

Moreover, since the market has reached maturity and

the number of cell phone users has reached a critical

level, competition is fierce. Relationship building

tools are used to keep the most profitable customers

and increase consumption (e.g., offering points

toward gifts or free minutes, developing the range of

services). A confirmatory study was conducted

among customers with gym club membership in

order to test the validity of the measurement tools

and confirm our hypotheses with a more diversified

population. This type of service enabled us to exa-

mine the influence of staff attention on quality of the

relationship. Gym club members benefit from perso-

nalized service in the form of a progress report, an

exercise program and coaching with a trainer. These

fields of study are relatively homogeneous since they

are based on a subscription system, have a young

customer base and offer services with significant

value in terms of image.

Research design

The research design included four phases. In the

first phase, two focus groups were conducted with

students enrolled in a Masters in Management. From

these interviews, there emerged elements likely to

capture the CSC and its associated semantics. Two

scenarios in the cell phone sector, one negative and

one positive, were presented, one after the other. The

negative scenario described a situation in which

the participants cell phone carrier proposes an

exceptional offer designed to reward customer

loyalty. This offer is much less attractive than a similar

one proposed by an independent reseller. The posi-tive scenario describes an identical situation, but the

deal offered by the carrier is better than the one pro-

posed by the independent reseller. For each scenario,

the respondents had to answer the following question

individually and in writing: What words would you

use to describe how your cell phone carrier considers

you? In a second stage, each respondent read his

answer aloud to the group and discussed it.

These interviews revealed that respondents inter-

preted the service providers intentions toward them

William Sabadie12

Attention

Privileges

CSC

Quality of the

relationship

Figure 1. The mediating role of the CSC


8/18

(Friestad and Wright, 1994). First, the firms actions

led respondents to assess their rank in the customer

hierarchy: They think I am a very good customer,

They think I am an important customer compared to

I am just another customer, I have little value;another customer will replace me.

Second, the offer is assimilated as an effort to

reward the customers past and future loyalty. On the

one hand, the past relationship is evoked for the

negative scenario: They feel no gratitude toward

me, Loyalty is poorly rewarded. Imbalance in the

relationship can lead to feelings of injustice: I feel I

have been treated unfairly and betrayed. On the

other hand, for the respondents, the service provider

makes efforts according to the customers future

value in the positive scenario: They are trying to

earn my loyalty because I interest them, I am a big

customer; they know I will advertise their services.

Conversely, when the scenario is negative, the com-

mercial dimension of the relationship is emphasized: I

am only considered for my commercial value, for my

wallet, They think Im a cash cow, a way to make

more money, I am just another customer number

that brings in money.

Third, beyond commercial value, the respondents

interpreted the way they are considered as a person:

They think Im stupid, a fool, They couldnt care

less about me; they take me for a fool.The second phase consisted in calling on five

members of the French Marketing Association and

asking them to examine items created after the quali-

tative interviews and a review of the literature. These

experts were asked to sort items according to the

nature of the concept (CSC, service provider efforts,

other), to confirm the quality of the wording and

make suggestions concerning the relevance of

conceptual associations. Seven items were selected

for CSC: This firm seems to think I am not an inter-

esting customer, This firm thinks I am an impor-

tant customer, This firm has no respect for me,

This firm thinks I am an ordinary customer, This

firm thinks of me as a partner, I am more of a num-

ber than a customer for this firm, For this firm, I

am more of a friend than a customer.

A third phase consisted in collecting data via a

self-administered questionnaire. The study was

conducted with 203 students in undergraduate pro-

grams and continuous education courses who were

questioned on their relations with their cell phone

service provider. The final sample consisted in 60%

women and 40% men with an average age of 24.

Only cell phone subscribers were considered because

subscriptions offer more opportunities to assess custo-

mer relations. The average subscription fee was bet-ween 21 and 31 per month and respondents had

been with their service provider for 24 months on

average. The items were developed using theoretical

and empirical studies on the subject. The items

concerning perceptions of special treatment were ins-

pired by the work of Gwinner, Gremler and Bitner

(1998) and Salerno (2001). Sincerity of actions was

measured with the scale used in a previous study by

De Pechpeyrou, Parguel and Desmet (2006). The

work of Ivens and Pardo (2004) and Frankwick,

Porter and Crosby (2001) also contributed to measu-

ring the CSC. This was enriched by the results of the

qualitative study as well as the work of Gwinner,

Gremler and Bitner (1998) and Price and Arnould

(1999) on the strength and nature of ties within com-

mercial relationships. The quality of the relationship

was measured with items traditionally used to mea-

sure overall satisfaction, word-of-mouth and inten-

tion to pursue the relationship (e.g., Price and

Arnould, 1999). This pilot study allowed us to refine

the validity of existing scales and construct a scale

for the CSC.

Finally, a fourth phase consisted in collecting anew set of data from 200 gym club customers using a

questionnaire that was administered face-to-face.

Variable levels of attention granted by staff were

added to the model to reflect the personal dimension of

the relationship. The items were from the work of

Parasuraman, Zeithaml and Berry (1988) on service

quality. The final sample consisted in 56% women

and 44% men with an average age of 29. Only gym

club members were considered in order to remain

consistent with the exploratory study. The average

membership period was 10 months. Confirmatory

factor analyses were used to test the unidimensionality,

reliability and internal validity of the variables

(cf. Appendix A3). We applied a bootstrap method

with 200 resamplings preformed with Amos software

(version 7.0). The measurement model presents satis-

factory goodness of fit: 2/dl = 3.2, GFI = 0.92,AGFI = 0.89, CFI = 0.97, TLI = 0.96 and RMSEA =

0.05. The reliability of the scales is satisfactory with

values for Jreskogs rho greater than 0.75. Their

validity is confirmed because each latent variable



9/18

explains more than 50% of the variance with its

items (Fornell and Larcker, 1981). The standardized

factor loadings are greater than 0.50 (p = 0.01),

which indicates good convergent validity (Anderson

and Gerbing, 1988; Steenkamp and Van Trijp, 1991).

Discriminant validity is also satisfactory. The wea-

kest value of the square root of the AVE for each factor

is greater than the strongest correlation between

dimensions (Fornell and Larcker, 1981), except for

the tandem quality of the relationship-sincerity. An

additional analysis was therefore performed in which

the items of these two concepts were merged into a

single latent concept. This last model obtained lower

fit indices (2/dl = 4.42, GFI = 0.90, AGFI = 0.86,CFI = 0.94, TLI = 0.96 and RMSEA = 0.08). The

value of 2 indicates that fit is better when the two

variables are distinct (140.4 compared to 167.8). Wecan therefore confirm the discriminant validity of the

concepts. However, their correlation led us to inter-

pret the results of analyses of moderation with care

and to discuss the direct influence of perceived since-

rity on the quality of the relationship.

Results of the study

The structural model was tested in the context of

the second dataset concerning gym club services.This choice was motivated by three reasons. The first

argument is methodological in nature. Churchill

(1979) recommends confirming a scale with a different

sample than the one used for the exploratory study.

Second, the first dataset was collected from students

while the second set was from a more heterogeneous

population. Third, the field of gym clubs allowed us to

integrate interpersonal relations as an antecedent ofthe CSC. This was not possible in the cell phone sector

because interactions with service staff usually occur

when the customer encounters a problem.

Estimations of standardized coefficients, t-values and

statistics of goodness of fit are presented in Table 1.

On the one hand, privileges and attention granted

to the customer contribute to explaining his CSC (R2 =

0.45). The CSC has a significant influence on quality

of the relationship ( = 0.16,p < 0.05). The link bet-ween attention granted by staff and quality of the

relationship remains significant despite introduction

of the CSC in the model. Attention has a particularlystrong influence in that it contributes to explaining

the CSC ( = 0.48,p < 0.01) as well as quality of therelationship ( = 0.60,p < 0.01). Therefore, the CSCpartially mediates the relationship between attention

and quality of the relationship. However, the link bet-

ween perceived privileges and quality of the relation-

ship vanishes when the CSC is introduced in the

model. The CSC completely mediates the link bet-

ween privileges and quality of the relationship.

Therefore, hypotheses H1 and H2 are confirmed. In

the end, the influence of attention granted by staff onquality of the relationship is much stronger than the

influence of other variables. In fact, to its direct coef-

ficient of 0.60 we must add its influence via the CSC

William Sabadie14

Table 1. Estimation of the models structural parameters

Implied relationship Standardized coefficients t-value R2

Privileges CSC 0.47 5.70 0.45

Attention CSC 0.48 6.21CSC Quality of the relationship 0.16 1.99 0.48

Attention Quality of the relationship 0.60 7.04

Privileges Quality of the relationship 0.09 ns

2/dl = 1.77GFI = 0.92

Fit indices for the model: AGFI = 0.89

TLI = 0.96

CFI = 0.96

RMSEA = 0.06


10/18

(0.16 x 0.48 = 0.08) and compare this to 0.16 for the

CSC and 0.075 for privileges (0.16 x 0.47).

The impact of perceived sincerity was examined

through a multi-group analysis of its effects on the

general model and on each link (Jaccard and Wan,

1996; Ping, 1995; Baron and Kenny, 1986).

Therefore, the data were split in half according to the

criterion of the median (MedianSincerity = 3.6). The

Chi-square difference test was used to test the

influence of this moderating variable on the general

model. The global fit of the model for the two sub-

samples (weak sincerity and strong sincerity of

actions) is satisfactory (2/dl = 1.34, GFI = 0.89, CFI =0.96, TLI = 0.95 and RMSEA = 0.04). This model

was compared to a model where all the links were

constrained to equality in the two sub-samples. The

model with constraints on the factor loadings shows asignificant difference for 2 at a threshold of 5%(free= 171.14 (128) <

2constrained = 180.92 (132)).

We can therefore confirm the moderating effect of

perceived sincerity. This effect should be specified

by testing each of its structural links (cf. Table 2).

However, the CSC completely mediates the link bet-

ween the service providers actions and quality of the

relationship when the firms acts are perceived as sin-

cere. Hypothesis H5 is confirmed. However, we

should be careful in interpreting these results as per-ceived sincerity and quality of the relationship are

strongly correlated (corr = 0.58,p < 0.01).

DISCUSSION

These results confirm the theoretical frameworkof the study. The CSC contributes significantly to

explaining the quality of the relationship ( = 0.16,p


11/18

by the firm contribute equally to explaining the CSC

(attention = 0.48 and privileges = 0.47; R2 = 0.45).

Service companies therefore have two alternative or

complementary strategies they can use to influence

the CSC. First, attention concerns the quality ofinteractions with service staff. Therefore, efforts at

listening, following up on inquiries and personalizing

services contribute to the customers assessment of

his position in the firms customer ranking system.

These efforts also result from the firms desire to dif-

ferentiate itself from competitors by offering greater

attention to customers. Gym club customers benefit

from special attention at the start of the relationship. A

diagnostic of their physical abilities and the creation of

a fitness program offer an ideal opportunity to build a

personalized relationship. Therefore, 80% of respon-

dents had favorable assessments of the quality of

relations with staff. This assessment contributed to

explaining why 50% of customers believed they

enjoyed special status. Moreover, 86% evaluated the

quality of the relationship positively. However, it is

important to note that some gym club members could

have a functional orientation rather than a social one

(Sabadie and Prim-Allaz, 2005) and therefore not

appreciate the attention of a coach due to their expert

level, for example.

Second, privileges follow a different logic as the

idea is to differentiate target customers from others.Thus,Nature & Dcouverte offers customers exclu-

sive deals and privileges if they join the retailers

loyalty program. These special deals are adapted to

customer seniority. The results of this study show

that the service companys initiatives to convince

customers that they benefit from privileged status

have only a minor influence on quality of the rela-

tionship. Moreover, the CSC plays an important role in

the process underlying this relationship since it com-

pletely mediates it. Special attention contributes to

feelings of recognition and belonging to a select

group of customers (Collin-Lachaud and Sueur,

2008). Yet, perceived sincerity conditions the effi-

ciency of strategies based on privileges. Therefore, it is

difficult to satisfy the need for recognition through a

loyalty program if it is not explicitly selective (Drze

and Nunes, 2009). It is this selectivity that demons-

trates the reality of privileged status for the customer.

Only 18% of gym club members believed they were

the object of privileged offers. Thus, the weak

influence of privileges on quality of the relationship

could be explained by the generalization of services

offered to all members. Therefore, access to services is

not exclusive enough to convince customers that they

benefit from special status. In the context of a stra-

tegy based on exclusive personalization, a servicecompany should make sure the customers impres-

sion of distinction is strong. On the one hand, this

means selecting a limited number of customers and

communicating on the selection process. For

example, Axa insurance proposes that its best custo-

mers join its Club Distinction in order to enjoy

exceptional privileges. Account managers are in

charge of selecting the best customers for the pro-

gram. Membership is not permanent. On the other

hand, this strategy implies proposing exclusive ser-

vices and exceptional advantages to target customers.

Customers who join Axas Club Distinction benefit

from long-term advantages (special deductibles for

car or homeowners insurance in the event of an acci-

dent, for example) and other occasional privileges

(free admission to museums). However, it is impor-

tant to point out that some customers are not interested

in exclusive offers because it is more important for

them to feel they belong to a group (Salerno, 2001). In

addition, revoking privileges for certain customers

can be highly risky for service companies (Wagner,

Hennig-Thurau and Rudolph, 2009).

Exclusive and non-exclusive personalization ini-tiatives can compliment each other. Indeed, while

Axas Club Distinction offers exclusive advantages,

the firm also promotes relations between the custo-

mer and his account manager. Moreover, not all firms

can capitalize on a strong, high-quality relationship

between service staff and customers. To remedy this

problem, retailers likeNature & Dcouverte propose

dedicated helplines for member customers. They also

propose establishing ties with other loyalty club

members during specific events. Thus, the social

dimension of the relationship can involve service

staff or other customers and be based on the idea of

exclusivity.

The importance of the CSC in corporate-custo-

mer relationships leads us to reflect on its implica-

tions in terms of social justice. From an instrumental

perspective, the sentiment of justice, qualified as dis-

tributive, is based on perceived fairness (Adams,

1965). In the context of this study, the level of attention

and privileges can be assimilated to compensation

and this compensation can be compared to customer

William Sabadie16


12/18

efforts (particularly in terms of price). This comparison

of efforts and compensation is similar to the process

used to define the concept of value. It allows us to

consider the CSC as a dimension of an exchanges

value (Aurier, Evrard and NGoala, 2004; Holbrook,1999). More generally speaking, the CSC results

from an assessment of fairness when the individual

compares the firms practices with existing social

standards. For example, discourteous behavior or dis-

crimination based on gender or race is particularly

hurtful for the customer as they exclude him from a

social group. This line of reasoning can be broadened

to the extent that marketing strategies tend to

increase the level of service a customer believes he is

entitled to. Thus, any disappointment can be interpre-

ted as a transgression of the social rule that classifies

customer satisfaction as a top priority for businesses.

Examples are not lacking where reality contradicts

this myth. Yield management techniques, for

example, have led customers to observe discrimina-

tion that is not based on loyalty, but on maximum

profits for the firm.

Finally, these results show that perceived since-

rity is a key determinant in quality of the relation-

ship, exerting both a direct and indirect effect. On the

one hand, the correlations table provided in

Appendix A3 shows sincerity is the variable that is

the most strongly correlated with quality of the rela-tionship (corr = 0.58,p < 0.01). On the other hand, it

moderates the influence of the CSC on quality of the

relationship. The customer does not only assess the

benefits he can obtain through relationship marketing

programs, but also the underlying objectives of the

service companys offer (e.g., Boulaire, 2003). This

observation encourages the inclusion of perceived

sincerity in research on the effects of relationship

marketing.

CONCLUSION

The aim of this study was to answer three ques-

tions. The first concerned customer perceptions of

their status in cases where there is no explicit or offi-

cial customer hierarchy established by the firm. The

construction of a parsimonious measurement tool

allowed us to assess the CSC. The results of this

study demonstrate the interest of a qualitative

approach in evaluating relationship marketing initia-tives. It would be appropriate, for example, to consider

the CSC in order to gain a clearer understanding of

how loyalty-building efforts influence customer

behavior (e.g., Bolton, Kannan and Bramlett, 2000;

Yi and Jeon, 2003; Lewis, 2004). The CSC is an

intangible advantage, and therefore one that is difficult

to imitate, which managers could use to improve

relationship quality. The second question concerned

the process of creating the CSC. Exclusive and non-

exclusive personalization initiatives were both effective

in the situations studied. However, our results

demonstrate the interest of a strategy based on rela-

tionships between service staff and customers and

the skepticism of the latter as to the real nature of the

exclusive privileges they receive. The third question

dealt with the influence of the CSC on relationship

quality. Our results show that the CSC should be

considered an explanatory variable of relationship

quality in addition to staff attention and privileges,

which are the most commonly used variables. The

main limitations of this study concern its exploratory

nature. The field selected for our research did not

allow us to definitively confirm or refute our hypo-theses, and the modest size of our sample encourages

further tests of our conceptual model on a larger

scale. Moreover, only customer perceptions were stu-

died. It would be interesting to analyze these percep-

tions while examining the nature of initiatives offe-

red by the firm.

The characteristics of the relationship between cell

phone carriers, or gym clubs and their respective custo-

mers, raise the problem of the studys external validity.

For example, most customers, and the entire sample in

this study, are bound by the duration of their member-

ship or subscription plan. In the cell phone sector, it

has only recently become easier to change service pro-

vider, and customers are not always aware of these

new conditions. These fields allowed us to study a

depersonalized relationship associated with mass mar-

keting, on the one hand, and a more individualized

relationship that was more sensitive to interpersonal

interactions, on the other. Nevertheless, the CSC scale

must be confirmed in a context where strong ties are

more likely to be established.



13/18

This study paves the way for future research on

several levels. First, it is necessary to further analyze

the mechanisms involved in creating the CSC and its

consequences. On the one hand, the antecedents of

the CSC could be enriched. For example, Salerno(2001) emphasizes the multitude of personalization

schemes and their influence on customer expecta-

tions, depending on whether they rely on exclusivity or

not. Perceived sincerity of advertising could be lin-

ked to the mechanisms used by the service company -

mass marketing or not, for example. DeWulf,

Odekerken-Schrder and Iacobucci (2001) show how

frequency and personalization of communication ini-

tiatives, preferential treatment and rewards for

loyalty can influence the customers perception of

the firms efforts to improve relations. Study of the

CSC according to the nature and importance of the

service companys efforts would be an interesting

subject for future research. On the one hand, the

consequences of the CSC encourage clarification of

its role in the causal chain between satisfaction, trust

and loyalty intention. Collin-Lachaud and Sueur

(2008) highlight the positive link between special

attention and the attitudinal and behavioral compo-

nents of loyalty, while the results of this study show

the mediating role of the CSC. More generally, the

CSC should be placed within a complex network of

variables likely to characterize the quality of a rela-tionship. While it has not been conceptualized in this

study, our results show the influence of perceived

sincerity on the CSC and relationship quality. This

paves the way for additional, complementary studies

specifying the role of sincerity and the means of

influencing customer perceptions. Furthermore, stu-

dying the role of the CSC in atypical events such as

service incidents (Hart, Heskett and Sasser, 1990)

could demonstrate the links between this variable

and the customers feelings of fairness. Indeed, mar-

keting literature has devoted relatively little attention to

lack of consideration for customers and its effects on

relations with the service firm (Wagner, Hennig-

Thurau and Rudolph, 2009; McColl-Kennedy et al.,

2009). Yet, Pharo (2001) underlines the importance

of considering feelings of disrespect, which he des-

cribes as a powerful vector for aggressive behavior:

The experience of disrespect, which is in itself an

injustice, has perhaps an even greater causal effect

than the experience of other forms of injustice as one

can suffer more from the disrespectful character of

poor treatment than from the treatment itself (p. 9).

McColl-Kennedy et al. (2009) show how service

incidents can spark consumer rage and particularly

violent behavior toward the service company. Thus,

marketing research on handling service incidents andcomplaints emphasizes the need to restore the custo-

mers impression of fairness (Hart, Heskett and

Sasser, 1990; Sabadie, Prim-Allaz and Llosa, 2006).

Tax et al. (1998) have shown how important compo-

nents of procedural and interactional justice (simplicity

of dealing with claims, speed of response or staff

efforts, for example) are in this context. Yet, justifica-

tion of their importance has been limited to exami-

ning the costs for the customer of solving the pro-

blem (frustration and wasted time, for example). The

idea of considering components of fairness as signs

of customer status has never been studied, even

though this has often been cited in organizational

literature (Lind and Tyler, 1988; Tyler and Lind,

1992). In fact, components of fairness aim to specifi-

cally improve feelings of consideration for the vic-

tim who needs to be valued and esteemed by others

(Folger and Cropanzano, 1998).

In addition, it would be appropriate to study the

CSC from a longitudinal perspective. Houston and

Gassenheimer (1987) associate the principle of reci-

procity with social distinction. Thus, the more the

relationship offers opportunities for reciprocal contri-butions and compensations, the more social distance is

reduced. Conversely, if one party believes it has not

been compensated for its contributions, social dis-

tance can increase until the relationship is broken off.

These hypotheses could be tested by linking the

efforts of the service provider (objective status) to the

evolution in status perceived by the customer

(Frankwick, Porter and Crosby, 2001) in a B-to-C

situation. From a psychometric standpoint, a categori-

cal measure of the CSC could be envisaged in a way

that is consistent with the process of social categoriza-

tion (Tajfel, 1978) and with the aim of simplifying

the respondents task.

Finally, the efforts of service companies to encou-

rage the emotional attachment of their best custo-

mers, and even their identification (Battacharya, Rao

and Glynn, 1995; Fournier, 1998), raise the question of

the CSC in terms of identity. Indeed, the aim of the

service firm is to get customers to identify with a

group (in this case the firm and its loyal customers). In

exchange, customers benefit from belonging to the

William Sabadie18


14/18

group, which reinforces their self-esteem (Tyler and

Lind, 1992). Yet, by identifying himself with the

loyal customers of a firm, the customer also runs the

risk of losing his identity if he is excluded from the

group (Lind, 2001, pp. 61-63). Wagner, Hennig-Thurau and Rudolph (2009) show that demotion of a

customer within the hierarchy of a loyalty program

influences his loyalty intentions more than a promo-

tion. Similarly, the CSC can be strongly deteriorated

when an individual observes that he has been treated

differently from the other members of a group he

identifies with. For example, Salerno (2001) shows

that this feeling of belonging to a group of customers

negatively influences expectations of special pro-

ducts and privileged services. Indeed, while exclu-

sive offers meet the need to feel unique, they inter-

fere with the need for belonging to a social group.

The feeling of belonging to a given group of custo-

mers can explain why some customers reject offers

that tend to symbolically distance them from their

reference group. In addition, future research should

specify the level of expectations in terms of status

and the consequences of the CSC on relationship

quality depending on whether customers identify, or

not, with the service company and a given group of

customers. This question could be particularly

important when the service firms offer contributes to

the individuals social identity (Belk, 1988;McCracken, 1986; Richins, 1994).

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Appendix A1. Scenarios used in the qualitative study

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Negative scenario:

You want to change your cell phone. You contact your carrier who makes a

proposal that he presents as an exceptional offer because it is reserved

for only 100 customers and is designed to reward your loyalty (3 years): a

Nokia 5200 cell phone worth 100 for only 55 and the possibility of

allowing one of your friends to take advantage of this special offer, provi-

ding he/she signs up for a 24-month subscription.

The following week, you walk past the window of a PhoneHouse shop

and see a special offer for the Nokia 5200 at only15. You find out you can

take advantage of this offer without changing your current plan.

Positive scenario:

You have broken your cell phone after only two months of a 24-month

subscription. Your insurance does not cover your phone and your

contract does not allow exchanges. You contact your carrier who makes a

proposal that he presents as an exceptional offer because it is reserved

for only 100 customers and is designed to reward your loyalty (3 years):A

Nokia 5200 cell phone worth 100 for only 25 and the possibility of

allowing one of your friends to take advantage of this special offer, provi-

ding he/she signs up for a 24-month subscription.

After shopping around, you realize it is impossible to own a Nokia 5200 forless than75 due to its technical features and recent launch on the market.

Appendix A2. Correlations of items constituting relationship quality

Satisfaction Loyalty intention Word-of-mouth intention

Satisfaction 1 0.630(**) 0.704(**)

Loyalty intention 1 0.626(**)Word-of-mouth intention 1

**The correlation is significant at a level of 0.01 (bilateral)


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Appendix A3. Measurement model


Status 0.79This firm thinks I am an ordinary customer

(-)

0.741

This firm seems to think I am not an interesting customer (-) 0.858

This firm thinks I am an important customer 0.689

Exclusive personalization: Privileges 0.88This firm treats me better than other customers 0,672

I am granted more consideration than most customers 0.809

I am entitled to special treatment 0.947

This firm makes me a member of a privileged group 0.759

Non-exclusive personalization: Staff attention 0.85The staff grants you personalized attention 0.839

The staff cares about serving you better 0.885

The staff is always there to help you 0.716

Quality of the relationship 0.86Globally, I am satisfied with the services of my

gym club

0.818

I think I will continue to use the services of my

gym club in the future

0.751

I would recommend my gym club to someone who

asked for advice

0.860

Sincerity of actions 0.75The offers proposed by this firm are sincere 0.763

The marketing campaigns this firm addresses me

are credible

0.762

This firm is not trying to trick me 0.735

Table of correlations between concepts

Status Privileges Attention Quality rel. Sincerity

Status 0.55*

Privileges 0.23 0.64

Staff attention 0.31 0.04 0.65

Quality of the relation 0.24 0.06 0.46 0.68

Sincerity of actions 0.36 0.08 0.45 0.58 0.50

* The vc are shown on the diagonal

Because You'Re Worth It a Study of the Consumer Status Concept

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