Understanding how satisfactory service relationships can be mutually beneficial in the higher education context

Abstract

Purpose While extant research has predominantly focused on outcomes of customer satisfaction that benefit the focal firm such as customer engagement behaviors (CEBs), little is done to understand human capital-related outcomes that directly benefit customers and thus benefit the firm indirectly. Drawing on the theory of reasoned action, broaden-and-build theory of positive emotions and human capital theory, this study aims to understand how and why a satisfied customer benefits the firm directly (CEBs) and indirectly (human capital-related outcomes). Design/methodology/approach Following a sequential mixed-methods approach, two studies are conducted in an extended service encounter context (higher education) where customers also constitute key human capital of the service firm. First, a qualitative study is conducted, which is then followed by a quantitative study. Survey data collected from students working as interns in organizations and their immediate managers resulted in 209 “intern–manager” dyads. Findings The findings demonstrate that customer satisfaction on its own does not substantially account for either human capital-related outcomes or CEBs (except word of mouth [WOM]). Both emotional and cognitive mechanisms play key and unique mediating roles in translating satisfaction into outcomes that benefit a service firm directly and indirectly by benefiting its customers. Research limitations/implications While much research demonstrates benefits of customer satisfaction for the focal firm, this research advances our understanding of the novel consequences of customer satisfaction by shedding light on human capital-related outcomes that directly benefit customers. It also aids in explicating prior inconsistent findings on the relationship between customer satisfaction and CEBs by uncovering the underlying mediating mechanisms. Practical implications This investigation provides a deeper understanding of the significance of customer satisfaction by demonstrating how and why satisfied customers increase firm value beyond purchase, for instance, by being direct (through positive WOM) and indirect (through enhanced human capital performance) promoters, consultants (through participation) or investors (through monetary giving). A key implication of this research is that simply enhancing customer satisfaction on its own may not suffice as the findings suggest that satisfaction translates into beneficial outcomes only when satisfaction is channeled toward enhancing customer perceptions of competence and their positive emotions. Originality/value This study contributes to the literature by providing a deeper understanding of how and why customer satisfaction influences outcomes that not only benefit the firm but also its customers in extended service encounter context.

Understanding consumer behavior in phygital environments: an interpretivist methodological framework

“…Emotional coding involves systematically categorizing and coding the emotional expressions and experiences described by consumers in the data (Malhotra et al, 2023). Researchers can identify different types of emotions, their intensity and the contexts in which they arise, providing a comprehensive understanding of consumers' emotional dimensions (Standing et al, 2016).…”

“…Emotional coding involves systematically categorizing and coding the emotional expressions and experiences described by consumers in the data (Malhotra et al. , 2023).…”

“…These photographs can serve as prompts for emotional coding, as well as subsequent interviews or discussions, enabling participants to provide deeper insights into their experiences and emotional responses (e.g. Malhotra et al. , 2023).…”