Customer preference for decision authority in credence services

Abstract

Purpose – The purpose of this paper is to examine the effects of offering customer decision authority on customer satisfaction in credence services, and the moderating effects of customer persuasion knowledge and service provider credibility. Design/methodology/approach – A video-based experiment is conducted to achieve high similarity to real service encounters. The video comprises three levels of customer authority while service provider credibility is manipulated. In a subsequent questionnaire, customer response and customer persuasion knowledge are measured. Findings – Results suggest that greater decision authority increases customer satisfaction. However, customer persuasion knowledge and provider credibility together were found to moderate these effects. Offering decision autonomy is most important when source credibility is low and persuasion knowledge is high. Research limitations/implications – The study setting is an initial healthcare encounter. Other service settings and service provider communication behaviors, such as empathy, responding to customer queries, and length of encounter are not considered in this study but should be further studied. Practical implications – The study confirms that offering decision authority to customers increases satisfaction only under certain circumstances. Customers are willing to relinquish authority to credible service providers who then direct customer decisions in order to maintain service quality. Offering decision autonomy to customers is suggested when provider credibility is low and customer persuasion knowledge is high. Originality/value – Analysis of credence service encounters is based on agency theory. Specifically, this study highlights the role of customer (principal) persuasion knowledge, which acts as a qualifier for the principal-agent problem because it alerts the customer to possible persuasion attempts by the service provider, whereas agent credibility eases customer suspicion.