Between a rock and a hard place: Seizing the opportunity of demanding customers by means of frontline service behaviors

Highlights

• Frontline employees adapt the levels of their post-transaction service behaviors when serving demanding customers.

• Customer demandingness should not be conceived all the time as a threat if matched with post-transaction service behaviors.

• To work with demanding customers, service employees can focus on the service exchange that goes beyond what is delivered.

• Some of the post-transaction service behaviors increase customer satisfaction through value-based mechanisms.

• Post-transaction service behaviors differ among each other in how each affects customer value and customer satisfaction.

Abstract

Service businesses are increasingly facing more demanding customers as a result of a shift in power from the service providers' side to the customers' side. Related literature predominantly examines the negative side of this ongoing trend, while overlooking the positive side. The major aim of this paper is to examine how frontline employees — investment account managers — deal with the ongoing increase in customer demandingness. To address this, we draw on adaptability performance theory to test the facilitating effect of frontline employees' post-transaction service behaviors (SBs) — diligence, inducements, information communication, sportsmanship, and empathy — as a means of adaptation to higher levels of customer demand. Findings indicate that frontline employees adapt most of their SBs' intensities to match customers' demands. The results show that some SBs actually increase the effectiveness and efficiency of frontline employees' service performance, leading to an increase in customer value and satisfaction. Customer value is found as a mediator in some of the relationships between SBs and customer satisfaction. Contrary to the conception of the negative outcomes of customer demandingness, service firms need to consider taking advantage of customer demandingness by stressing the role of frontline employees in adapting to customers’ demands.

Introduction

During the last decade, the pendulum of power within commercial relationships has been steadily moving toward the customer side (Srivastava and Kaul, 2014). Customers are increasingly becoming more demanding in terms of value and overall experience (Kumar and Reinartz, 2018). Frontline employees (FLEs), with their boundary spanning function, are influenced by this increase in customers' expectations and demands because of the innate nature of the exchange process between customers and firms (Jelinek et al., 2006). Customers assess their overall service experience based on dynamic service interactions with FLEs, who are responsible for utilizing their competences as the unit of exchange (Vargo and Lusch, 2004). Service providers depend on FLEs to respond to customer demands as they are an indispensable part of the service experience (Sony and Mekoth, 2016) and at the heart of a firm's ability to adapt its services to match these demands (Gwinner et al., 2005).

Customer demandingness (CD) refers to the unique and countless demands of customers in acquiring need-fit, quality, support, and delivery from firms (Li and Calantone, 1998). Despite the efforts taken by most service firms to address the steady rise in CD and sophistication (Jaramillo et al., 2013; Kumar and Reinartz, 2018), many firms overlook some of their customers’ demands by not creating the proper value and service experience needed (Agnihotri et al., 2017a; Sandström et al., 2008). Furthermore, the lack of adequate knowledge regarding the CD concept has created a misconception of treating this concept as a consistent threat to service firms.

Service firms are being caught flat-footed and perceive higher levels of CD as, at best, inconvenient. The current study contradicts this misconception by showing that CD can result in higher levels of customer satisfaction (CS) on the condition that FLEs demonstrate and adapt their post-transaction service behaviors (SBs) that can drive value to customers. Frontline employees play a key role in keeping pace with customers' demands and creating value within the service exchange (Haas et al., 2012; Sheth and Sharma, 2008; Yoo, 2017). Despite the overall accepted importance of FLEs in providing excellent service exchange, there is still a need to examine the role of FLEs in creating customer value (CV) (e.g., Echchakoui, 2015; Plé, 2016). In addition, the post-transaction SBs experienced by customers during prolonged service exchange are overlooked in the literature (Agnihotri et al., 2017b). The relationships FLEs have with customers are dynamic in nature and require additional examination by means of understanding the synergetic experience between customers’ demands and the post-transaction SBs¹ of investment account managers — hereinafter identified as FLEs. In turn, these behaviors lead to CS based on increased value-in-use.

Along the lines of adaptive performance theory (Gwinner et al., 2005; Pulakos et al., 2000) and FLEs' post-transaction SBs framework (Ahearne et al., 2007), we postulate that FLEs respond to changes in customers' demands by adapting their SBs to create value and satisfy customers. By answering customer demands through a superior service exchange, FLEs can improve customer experience and provide service with higher levels of CV (Vargo and Lusch, 2008). Frontline employers’ SBs have positive value-based and relational outcomes at the customer level.

This study contributes to the literature and practice by examining the adaptability of FLEs through their SBs that constitute a major part of the service exchange with customers. We empirically test FLEs' behaviors at times of increased CD, a situation service providers and their FLEs face more frequently nowadays. It is important to emphasize that the majority of past studies has focused on specific transaction SBs, overlooking post-transaction SBs in a relational service context. The current study contributes to the literature by investigating the individual role of FLEs’ post-transaction SBs in driving CS through value-based mechanisms. Table 1 includes definitions of the five SBs: diligence, inducements, information communication, sportsmanship, and empathy.