Buyer Monitoring: A Means to Insure Personalized Service

Abstract

Marketing scholars have proposed that service employees play a primary role in delivering service quality. However, the question of how to motivate service employees to enhance service production has received little research attention. The authors address this gap by advocating a control mechanism first discussed in the economics literature—buyer monitoring. The authors focus on a pervasive form of buyer monitoring, voluntary tipping, and examine the effectiveness of this control mechanism as a means for improving service in two contexts: leisure cruises and restaurant dining. Despite a substantial interdisciplinary literature reporting a weak relationship between customers' perceptions of service and their tipping behavior, the results show that a policy of voluntary tipping has positive effects on the motivation and behavior of service workers and on customers' perceptions of the service those workers provide. These findings call attention to buyer monitoring as both a topic for academic research and a practical mechanism for motivating service employees. The findings also call into question trends away from tipping in service contexts, such as the cruise industry, and suggest that many service businesses for which tipping is not viable can benefit from alternative forms of buyer monitoring.

The underlying dimensions of tipping behavior: An exploration, confirmation, and predictive model

“…While there has been substantial debate in the literature regarding whether the act of tipping improves service quality (Azar, 2008;Kwortnik et al, 2009;Lynn and McCall, 2000), the findings herein suggest that tipping motivation is more self-centered and intrinsically contrived than previously elucidated in the literature. Inasmuch, it is suggested that future research on tipping motivation should include efforts to further develop the constructs identified in this inquiry and apply them in experimental settings.…”

“…From a pragmatic perspective, since tipping is a significant economic activity (Azar, 2008;Kwortnik et al, 2009), it is important for both managers and tipped service employees to better understand the multiple underlying dimensions that influence tipping motivation. From both perspectives, understanding the issues that motivate tipping behavior could lead to an increase in the number of patrons that leave tips and possibly an increase in tip amounts.…”

“…This practice could conceivably be a precursor to higher incomes for service workers, subsidized by the person consuming the service instead of by the firm. Hence, it is asserted that positive changes in tipping behavior have an isolated, yet conclusive influence on a firm's financial outcomes because (a) a firm can minimize its payroll expense and monitoring costs through the aforementioned consumer subsidy (Azar, 2004b), (b) equilibrium service quality is higher with the existence of tipping, yielding an increased level of customer satisfaction (Azar, 2004b;Kwortnik et al, 2009), and (c) higher incomes for tipped employees have a positive motivational influence, contributing generally to lower turnover rates (Dermody et al, 2004).…”

The effects of tipping policies on customer satisfaction: A test from the cruise industry

“…Second, research indicates that consumers believe tips are incentives that improve service (Mills and Riehle, 1987), so replacing voluntary tipping with service charges may reduce expectations for service quality, which in turn affect perceptions of service through assimilation (Herr et al, 1983) and/or expectancy effects (Rosenthal and Rubin, 1978). Third, a series of studies by Kwortnik et al (2009) found that voluntary tipping policies improve service levels by motivating servers to deliver friendlier and more personalized service, and a study by Lynn et al (2011) found that tipping helps to attract and retain more motivated and capable staff; taken together, these studies suggest that replacing voluntary tipping with service charges may reduce customer satisfaction by lowering actual service levels. With all of these theoretical processes pointing in the same direction, we hypothesize:…”

Individual differences in self-attributed motives for tipping: Antecedents, consequences, and implications

“…From a practical perspective, tipping affects the experiences of consumers (Mills and Riehle, 1987), the incomes and motivation of service workers (Kwortnik et al, forthcoming;Lynn, 2002), and ultimately the performance and profitability of service businesses (Lynn and Withiam, 2008;Schwartz, 1997). A better understanding of the determinants of tipping would inform servers' efforts to increase their incomes (Lynn, 2004a,b), managers' efforts to train and motivate their service employees (Azar, 2004a;Lynn, 2005), and executives' efforts to set optimal tipping policies (Azar, 2003;Lynn, 2008).…”