A neglected strategy of partial service termination and its impact on customers’ patronage

Mathieu Béal (), Caroline Bayart (), Lecuyer Charlotte () and Denis Clot
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Mathieu Béal: EESC-GEM Grenoble Ecole de Management
Caroline Bayart: LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique, LSAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon
Lecuyer Charlotte: LSAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon

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Abstract: This research introduces the strategy of partial service termination (PST) and its consequences on customers' patronage. PST is a company's strategy where the company decides to stop providing a service while maintaining the relationship with the customer; it represents an in-between strategy between other investigated strategies, like service demotion and service termination. Using longitudinal and archival data from 26,464 clients of a large French insurance company, from 2014 to 2019, results show that PST exerts a negative effect on customers' patronage. Build on justice theory, we explain that customers tend to restore justice after a PST by terminating their other contracts with the company, in the vein of "an eye of an eye and a tooth for a tooth." Moreover, we find relationship length to play a protective effect here, as customers reduce less their patronage after a PST as their relationship is longer.

Keywords: partial service termination; unprofitable customer management; patronage reduction (search for similar items in EconPapers)
Date: 2022-05-24
Note: View the original document on HAL open archive server: https://hal.science/hal-04919412v1
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Published in European Marketing Academy annual conference, May 2022, Budapest (Hungary), Hungary

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04919412

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