Commitment to a friend, a service provider, or a ...

J. of the Acad. Mark. Sci. (2008) 36:473–487 DOI 10.1007/s11747-008-0107-z

ORIGINAL EMPIRICAL RESEARCH

Commitment to a friend, a service provider, or a service company—are they distinctions worth making? Tim Jones & Shirley F. Taylor & Harvir S. Bansal

Received: 7 March 2007 / Accepted: 26 June 2008 / Published online: 18 July 2008 # Academy of Marketing Science 2008

Abstract In two studies, the authors examine three targets of commitment in service provider–consumer relationships and their effects on customer loyalty. The results indicate that service consumers distinguish between commitment to a service company, commitment to an individual in the role of service employee, and commitment to an individual outside of the role of service employee (e.g., a personal commitment such as a friendship). In addition, these three targets of commitment are hierarchically related and have differential effects on various customer responses. The results have implications for both customer relationship managers and researchers studying such relationships. Keywords Customer relationship . Customer commitment . Service loyalty . Role theory All things being equal, people will do business with a friend; all things being unequal, people will still do business with a friend. Mark McCormack A friendship founded on business is better than a business founded on friendship. John D. Rockefeller Shirley F. Taylor is deceased. T. Jones (*) Faculty of Business Administration, Memorial University of Newfoundland,, St. John’s, NL, Canada e-mail: [email protected] S. F. Taylor School of Business, Queen’s University, Kingston, ON, Canada H. S. Bansal School of Business and Economics, Wilfrid Laurier University, Waterloo, ON, Canada e-mail: [email protected]

Introduction Commitment, generally described as a desire to maintain a valued relationship (e.g., Moorman et al. 1992), is recognized as one of the building blocks of relationship marketing (Palmatier et al. 2006). As research in this area evolves, marketers increasingly borrow from the extensive literatures in psychology and organizational behavior (OB) to provide theoretical grounding for their models of commitment. Some of the most prominent researchers from the OB field asserted: “Perhaps the most significant developments in commitment theory over the past two decades have been the recognition that commitment (a) can take different forms and (b) can be directed towards various targets” (Meyer et al. 2004, p. 993). A number of researchers in marketing have adopted a “multi-form” perspective in which commitment to an organization is characterized by different motivators such as desire versus obligation or need (e.g., Gruen et al. 2000). However, research that considers the different targets toward which consumers can be committed has only recently emerged and seems to be divided into two different perspectives. One perspective, the entity view, makes a distinction between relationships the customer has with the service organization and relationships the customer has with an individual employee or representative of the firm (Hansen et al. 2003; Palmatier et al. 2007a,b). The other perspective, the rolebased view, appears in the literature on commercial friendships (Grayson 2007; Heide and Wathne 2006; Price and Arnould 1999). This research distinguishes between relationships that exist between customers and employees for the purpose of the provision of service versus relationships that exist outside of the service provision, for example, personal relationships such as a friendship. Our contribution is twofold. First, we reconcile these two views by focusing on three distinct targets of commitment in service relationships: organizational commitment, employee

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J. of the Acad. Mark. Sci. (2008) 36:473–487

commitment, and personal commitment that are differentiated both by entity (organization versus employee) and by role (service provision versus friendship). Second, we establish the value of additional relationships such as friendships between service employees and customers by demonstrating that commitment to these relationships enhances commitment to the service organization. Not much is known about the incremental or differential effects that these different targets of commitment may have on customer responses beyond the effect of the commitment to the service firm. If each of the three targets we examine distinctly affect customer responses, then commitment research should examine the relationships between the commitments, potential conflicts among the commitments (Heide and Wathne 2006), and how each one is formed. The importance of distinguishing between various targets of commitment may lie in its ability to explain customer responses that fall outside the terms of the commitment to the service firm. For example, employee and personal commitment may influence voluntary customer responses that are not required to maintain the service relationship, such as a willingness to recommend the firm or to pay more. However, if employee commitment and personal commitment lead to organizational commitment with no incremental effects on customer responses, then the focus of commitment research should be on the processes by which these first two commitments can be translated into organizational commitment. Resolving this issue is important for guiding future commitment research, as well as determining whether developing employee and personal commitment in service relationships has any practical benefit to service firms. Hence, the purpose of our research is to examine multiple targets of customer commitment in service relationships. First we use research from marketing, OB and psychology, along with social exchange theory, to identify different targets of commitment within a service setting. Next, we

examine the effects of these targets on customer loyaltyrelated responses using role theory; in doing so, we demonstrate how building customer commitment can contribute to a service firm's customer equity (Rust et al. 2000). Then, we present the methodology and results of two empirical studies examining relationship commitment in a service setting. We believe a better understanding of the commitment variable and its multiple targets in customer relationships will aid service firms in the development of policies and initiatives aimed at what Rust and his colleagues term “cementing the relationship” (ibid, p. 95).

Targets of commitment There has been a wealth of definitions provided for the concept of commitment in the fields of marketing (Bansal et al. 2004), organizational behavior (Meyer and Allen 1997), and psychology (Rusbult 1980). To a large extent, these definitions reflect that commitment to a relationship involves both a psychological state (e.g., a binding force; a link; a pledge; or a dedication), and a motivational phenomenon or intended behavior (e.g., to maintain the relationship, to anticipate future interaction, to remain with the organization). Thus, for this paper we summarize these conceptualizations and define relationship commitment as follows. Relationship commitment is a psychological force that binds an individual to the maintenance of the relationship with a specific target. In Table 1, we present a conceptual framework for the three targets of commitment in service relationships, and show how each target of commitment differs by both entity and role. Further, we integrate recent work from Heide and Wathe (2006) and Price and Arnould (1999) regarding de-

Table 1 Conceptual framework targets of commitment Targets of commitment

Organization commitment (OC)

Employee commitment (EC)

Personal commitment (PC)

Entity Exchange-based role

Organization Economic exchange (i.e., provision of service) Consequences (calculative) Instrumental orientation (i.e., maximize benefits and value of service) Instrumental responses (e.g., repurchase intentions, relative attitude, willingness to pay more, fidelity) motivated by self interest

Person Economic exchange (i.e., provision of service) Consequences (calculative) Instrumental orientation

Person Social exchange (e.g., friendship)

Role's underlying decision logica Relational orientationb

Customer Responses

a b

See Heide and Wathne (2006) See Price and Arnould (1999); Grayson (2007)

Appropriateness (heuristic) Intrinsic orientation (i.e., focus on enhancing relationship)

Instrumental responses Expressive responses (e.g., advocacy, (e.g., repurchase intentions, altruism) motivated by other interest relative attitude, willingness to pay more, fidelity) motivated by self interest


cision logic and relational orientation to make inferences about the possible relationships between each target of commitment and a variety of customer responses. In a services setting, consumers can become committed to two different entities: the service company and the individual employee with whom the consumer interacts. Further, based on social exchange theory (Cropanzano and Mitchell 2005; Thibault and Kelley 1959), the service employee may occupy two different exchange-based roles, one of economic exchange (i.e., the provision of service) and/or one of social exchange (i.e., a friendship). Thus, commitment to the person is a compound relationship since it contains multiple roles (Ross and Robertson 2007). For example, if Dave is a real estate agent with a firm called REMAX, and is also a friend of the consumer, there is a possibility of three distinct targets of commitment in this “service provider–consumer” relationship. The consumer may be committed to Dave as a friend (herein called “personal commitment”); to Dave as a real estate agent (herein called “employee commitment”), and to REMAX as his real estate agency of choice (herein called “organizational commitment”). While the last two of these commitments have been examined to a degree in marketing, the first has not, even though there has been work in the personal relationship area. Several researchers have referred to the friendships that can and do co-exist within commercial exchange relationships (e.g., Heide and Wathne 2006), suggesting that examining personal commitment as a distinct form in a service setting is a worthy endeavor. Research in sociology has demonstrated that exchanges within social networks are prevalent, and in some cases represent more than one-third of the exchange relationships that develop (DiMaggio and Louch 1998). Based on this conceptualization, we can specify three distinct targets of commitment in a relationship between service provider and consumer: (1) consumer to person as friend (entity = person, role = social exchange); (2) consumer to person as employee (entity = person, role = economic exchange), and (3) consumer to service organization (entity = service company/brand, role = economic exchange; Jones et al. 2008). In order for this notion of three targets to become the prevailing view in services marketing, it must meet at least two standards. First, the targets of commitment must be distinguishable from each other. Second, they must explain variance in important customer responses beyond that explained by customer commitment to the service organization. The consequences of commitment Marketing researchers have found commitment to the service organization to be of interest because of its association with important customer responses such as repurchase intentions, relative attitude, willingness to pay more, advocacy (i.e., willingness to recommend), and altruism (i.e., helping the service

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firm or other customers; e.g., Garbarino and Johnson 1999; Gruen et al. 2000; Pritchard et al. 1999). All of these customer responses are of interest to service firms since they can be implicitly linked to profitability (Jones and Taylor 2007; Reichheld 2003). We do not state any formal hypotheses for organizational commitment since the link between it and customer responses has been well-established in the marketing literature (e.g., Garbarino and Johnson 1999; Gruen et al. 2000; Pritchard et al. 1999). We do, however, expect differential effects on service consumers’ responses based on whether the target of commitment involves an economic or a social exchange. The outcomes of these commitments should be role-related. We believe that these differential effects occur because of the underlying decision logic (Heide and Wathne 2006) and the relational orientation (Price and Arnould 1999) associated with the two roles (see Table 1). Differential effects of these two targets of commitment on customer responses can be understood by using this role–theory perspective. In their work surrounding friends, businesspeople, and relationship roles, Heide and Wathne (2006) discuss how friends and businesspeople differ in their decision-making patterns because of the logic that underlies their decision-making. Decisions within a business relationship, with its role of economic exchange, are guided by consequences. With this in mind, a consumer committed to the economic exchange relationship with a service employee will respond in ways that maximize the benefits that ensue from this relationship. In other words, they will repurchase from the service firm, show preference for it, pay more for it, and be exclusive to it because it maximizes value to the consumer. In contrast, decisions within a social relationship are guided by rules of appropriateness. With this in mind, a consumer committed to a social relationship with a service employee will respond in ways guided by the rules appropriate to such a relationship. In this case, the personal relationship prescribes cooperative responses—advocacy and altruism, for example—even when such responses may not be of any benefit to the consumer. A similar argument can be made by referring to relational orientation. Recent studies in marketing have used a role– theory perspective to examine possible conflicting orientations of friendships and business relationships (Grayson 2007; Haytko 2004). We assert that different orientations towards the two relationships, with the person as a service employee versus with the person as a friend, result in different customer responses. Commitment to the service employee is based upon an instrumental orientation—the customer maintains the relationship, because it provides extrinsic material benefits (e.g., service quality, confidence benefits, special treatment) (Gwinner et al. 1998). Customer responses to this commitment, therefore, will be congruent with this instrumental orientation. The few studies in the services literature that have investigated these effects suggest that such rela-

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tionships may reduce customers' resistance to premium-pricing strategies (Mattila 2001) and share-of-category purchases (Reynolds and Arnold 2000). Both of these studies demonstrate that employee commitment tends to positively influence economic exchange-related responses such as willingness to pay more and fidelity. In contrast, personal commitment is based upon an intrinsic orientation whereby the desire to maintain the relationship exists due to the rewards of friendship (Price and Arnould 1999). As such, persons in committed relationships, such as friendships, are motivated by concern for the other party and often engage in behaviors that are expressive of the relationship or benefit the other, rather than themselves. Advocacy and altruism are examples of expressive responses that benefit the service firm or employee directly, rather than the individual customer. By recommending the service organization to others, helping the organization in some manner, or helping other customers, it is the service organization that benefits (Reichheld 1996). The study of personal commitment in the psychology literature suggests positive effects of personal commitment on a variety of expressive behaviors such as adaptive social comparison, willingness to sacrifice, and willingness to accommodate (e.g., Finkel and Campbell 2001). While there have been few studies in marketing that have examined the role of personal commitment in the prediction of such expressive customer responses, there has been some investigation into professional friendships that exist in service settings (e.g., Goodwin and Gremler 1996; Haytko 2004). Haytko's study involving advertising agency account managers found evidence of altruism and willingness to sacrifice for the sake of the relationship. Price and Arnould (1999) found that commercial friendships resulted in a higher willingness to recommend, while Brown and Reingen (1987) found that referrals for some consumer services were likely to stem from strong ties in a social network. These studies demonstrate that commitment to a person outside of the role of service provider tends to influence expressive consumer responses such as advocacy and altruism. In summary, we expect employee commitment and personal commitment to have differential effects on consumer responses because of the role's underlying decision logic and the orientation towards the relationship. In cases where a consumer feels committed to a service employee, s/he should engage in responses that are related to the nature of the economic exchange. In contrast, a consumer who feels committed to the service provider as a friend should engage in customer responses that are more closely related to the nature of the social exchange. Employee commitment will tend to be predictive of instrumental responses, whereas personal commitment will tend to be predictive of expressive responses. Hypothesis 1 Employee commitment in a service provider– consumer relationship will be positively


related to a service consumer's responses of: (a) repurchase intentions; (b) relative attitude; (c) willingness to pay more; and (d) fidelity. Hypothesis 2 Personal Commitment in a service provider– consumer relationship will be positively related to a service consumer's responses of (a) advocacy and (b) altruism.

The relationship between the targets of commitment We suggest that the three targets of commitment are related, since they share common aspects of our conceptualization of commitment that distinguishes between entities and roles. Organizational commitment and employee commitment share the roles of economic exchange, thus we would expect high levels of employee commitment to be associated with high levels of organizational commitment. Similarly, employee commitment and personal commitment share entities. As a result, we believe that high levels of personal commitment will be associated with high levels of employee commitment. Support for these relationships can be found by reference to social network theory and research in the area of constituentbased commitments in the organizational behavior literature. Social network theory (Granovetter 1973) suggests that a tie between two people is embedded in a network of other relationships. This network influences the people's thinking about all of the relationships within it; emotions and attitudes (such as commitment) are carried across these ties. When the customer has a positive and enjoyable interaction with the service employee, this helps to build employee commitment since satisfaction is a base of commitment (Bansal et al. 2004; Gremler and Gwinner 2000). The consumer then links this feeling of satisfaction to the service organization, creating higher levels of organizational commitment (Hansen et al. 2003). Thus, the quality of the economic exchange between service employee and customer, resulting in higher levels of employee commitment, will also result in higher levels of commitment to the organization. In a similar vein, personal and employee commitment share ‘entities’. When the customer experiences satisfactory social exchange with the service employee resulting in higher levels of personal commitment, this will result in higher levels of employee commitment as it is transferred over to the economic relationship. We propose that the commitment between service employee and consumer is a constituent of the commitment between service organization and consumer. A similar argument for the constituent nature of commitments can be found in the OB literature, where supervisor commitment, work-team commitment, and other constituents of the organization are all components of organizational commitment (Maertz et al. 2002). Given the inseparability of the service experience from the service employee (Lovelock 1983), we can infer that a similar


relationship exists, i.e., that the service employee–consumer relationship would be a constituent or necessary ingredient of a service organization–consumer relationship. The link between relational variables at the employee level and the organizational level has been well-established in recent marketing research that has investigated relationship quality (Palmatier et al. 2007a), loyalty (Reynolds and Beatty 1999), and commitment (Hansen et al. 2003). The link between the two is almost always positioned with employee commitment as an antecedent to organizational commitment. Palmatier et al. (2007a) provide a solid argument for why commitment flows in this direction and not the other. They posit that high relationship quality with the organization, their relational variable of interest, may be based on diverse factors and actors (p. 215). Similarly, high organizational commitment may be based on diverse factors such as service quality, alternative attractiveness and multiple service employees as actors. Thus, high levels of employee commitment will contribute to the development of organizational commitment. We can apply similar reasoning to the link between personal commitment and both employee and organizational commitment. To the best of our knowledge, there is no research that directly links these two; however, there has been some research on the use of friendships and community ties for commercial exchanges (e.g., Brown and Reingen 1987; DiMaggio and Louch 1998; Rangan 2000). A personal commitment or a friendship is essentially another layer of the relationship between service consumer and employee or organization. While it is possible that a friendship may develop because of a service relationship or vice versa, we believe that if a personal commitment does exist, it serves to enhance commitment to the economic relationship between consumer and service employee and organization by adding another psychological force to compel maintaining the relationship. Relationship commitment has often be posited as an outcome of relationship quality, alternative attractiveness, and switching costs according to Rusbult's investment model (Rusbult 1980; Rusbult et al. 1998). We argue that the risk to a personal relationship acts as another switching cost in the economic exchange relationship between service consumer and employee and between service consumer and the organization, thereby creating higher levels of commitment to both these targets. In summary, both social network theory and constituent arguments support links between the three targets. We propose the following hypotheses. Hypothesis 3 The higher the level of a consumer's personal commitment, the higher is the level of his or her commitment to the service employee. Hypothesis 4 The higher the level of a consumer's commitment to the service employee, the higher is the level of his or her commitment to the organization.

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Hypothesis 5 The higher the level of a consumer's personal commitment, the higher is the level of his or her commitment to the organization.

Study one In this section, the methodology and results of a consumer survey are presented. The survey examined the targets of commitment that exist in service provider–consumer relationships and consisted of three parts. Respondents were instructed to think about and identify a service company that they dealt with on a regular basis; they were encouraged to choose a service company at which they tended to deal with the same person each visit. The first part of the survey inquired about the consumer's relationship with the service company. The second part of the survey inquired about the consumer's professional relationship with the person who is their service provider. The third part of the survey inquired about the personal relationship that they had with the person that was the service provider. Measures All reflective scales were measured using a five-point Likert scale anchored by 1 (strongly disagree) to 5 (strongly agree). We used pre-existing scales from the literature on service loyalty (e.g., Jones and Taylor 2007) and measured six different manifestations of loyalty including: repurchase intentions, relative attitude, willingness to pay more, advocacy, altruism, and fidelity. Since perceived service quality has been identified as one of the key drivers of loyalty-related outcomes in services (Zeithaml et al. 1996), we included it as a control variable, and measured it using a four-item scale that tapped into consumers' overall evaluations of the service (Dabholkar et al. 2000). To measure commitment to a target, we used the six-item scale used extensively by Rusbult in her work in interpersonal relationships (Rusbult 1980) with subtle changes made to the wording of each question to distinguish between targets of commitment. We conducted a pilot study involving 220 adult consumers to validate the commitment scales in the context of service provider–consumer relationships. We used separate common factor analyses to verify that measurement items for each target of commitment loaded on one factor only, thus providing evidence of unidimensionality (Gerbing and Anderson 1988). We removed two items with poor loadings (0.80). For discriminant validity, we performed a confirmatory factor analysis using one-factor, two-factor and three-factor models of commitment. The three-factor solution (i.e., representing the three distinct targets of commit-

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ment) had the best overall fit to the data (NNFI = 0.93, SRMR = 0.05). Furthermore, a chi-squared difference test between the two-factor and three-factor solution (χ2 difference (2) = 58.1, p0.5 and on one factor only)1. Confirmatory factor analyses were conducted to estimate the fit of one-factor, two-factor, and three-factor models to represent the targets of commitment as evidence of discriminant validity. The three-factor model fit the data well (NNFI= 0.94, SRMR=0.03) and provided a significantly better fit over the two-factor solution (χ2 difference=372 (2), p< 0.05); the two-factor solution was a better fit than the onefactor solution (χ2 difference=990 (1), p0.5). Also, we conducted a series of confirmatory factor analyses using four-factor, five-factor and six-factor models of loyalty respectively. In the six-factor model, all loyalty variables represented separate constructs. We tried several variations of the four-factor and five-factor models (i.e., different combinations of constructs loading together). The six-factor model had the best fit to the data (NNFI=0.92, SRMR= 0.06) and was a significant improvement over either of the other two models (χ2 difference (5) >95, p