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EMAC 2022 Annual


A NEGLECTED STRATEGY OF PARTIAL SERVICE TERMINATION AND ITS IMPACT ON CUSTOMERS’ PATRONAGE
(A2022-107227)

Published: May 24, 2022

AUTHORS

Mathieu Béal, Grenoble Ecole de Management; charlotte lecuyer, University of Lyon; Caroline Bayart, University of Lyon; Denis Clot, University of Lyon

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.