Does Personal Interaction Quality Really Pay? On the Influence of Personal Interaction Quality on Willingness to Pay

Abstract

This article focuses on the influence of perceived quality on the willingness to pay in the case of services in restaurants, aiming at contributing to the empirical analysis of service interaction quality in the hospitality sector. The service literature traditionally considers personal interactions between individual service-providing staff and individual customers to be the main contribution to service quality experiences. The quality of service interaction is often thought to outweigh any other service process experiences and results. A case study approach was applied, including customer surveys in four different hotels/restaurants. The main findings indicate that good quality perception leads to higher readiness to pay (share of wallet), as well as readiness to build identification and customer loyalty towards the restaurant visited. Customer loyalty in this context is not an obligation, meaning that regular customers do not necessarily feel obliged to regularly visit a specific restaurant, but they have a more precise idea of the budget they are willing to spend on the occasion of a restaurant visit. Investment in loyalty programs without a clear focus on customer budgets should hence be questioned and give way to investments in clear prices, standards, and quality.