Value from Experiences and Customer Happiness: Implications for Customer Experience Management: An Abstract

Abstract

Offering a strong customer experience gives companies a difficult-to-copy competitive advantage, yet companies often do not understand what customers gain from such an experience in return. We posit that customers derive different types of perceived value as they go through an experience, which contributes to customer happiness and, in turn, positively affects desired customer experience management (CEM) outcomes. We test a proposed model that links customer experience to CEM outcomes (e.g., customer recommendation) in service contexts (a gym and four airlines). Six types of perceived value (functional, escapist, fantasy, intellectual, self-image, and status signaling) and two types of customer happiness (hedonic [experiencing pleasure] and eudaimonic [reaching meaningful goals]) complete the model. Structural equation modeling is the main analytic method. The results confirm that different experiences create different kinds of perceived value, which subsequently influence customer happiness in different ways. The results also show that increasing customer hedonic happiness is the key mechanism through which managers can improve customer recommendation, whereas increasing customer eudaimonic happiness improves other CEM outcomes, such as frequency and loyalty intention. Managers need to be cautious, however, about the role of specific values in bridging experiences and hedonic happiness. The impact of some values (e.g., fantasy in a gym, intellectual in an airline) on hedonic happiness could backfire. Finally, the length of the relationship between a customer and a firm moderates the results. For example, customers who have been with the firm for a shorter duration derive more value in self-image and status-signaling value from brand experience than those with a longer duration. By contrast, customers with a longer duration attain more eudaimonic happiness from perceived value in escapist and intellectual value than those with a shorter duration. The study provides managers guidance on how to effectively provide a strong customer experience and improve CEM outcomes in different service settings.