Author(s): Svetlana V. Davis
It is a widely held notion that customer prioritization strategies (focusing efforts on the most valuable customers) are profitable for firms. However, such increased focus consequently results in some customers receiving comparatively disadvantaged treatment. This paper performs three experimental studies involving 516 Canadian participants in 2018 to investigate how preferential treatment resulting from customer prioritization (CP) strategies relates to customer entitlement and subsequent customer retaliatory intentions. Results show that customers with strong brand relationships feel entitled if they have received disadvantaged treatment under a customer prioritization strategy. Such feelings translate into increased demands on the firm, culminating in an increased likelihood of retaliatory actions. Moreover, feelings of entitlement are exacerbated if these customers were invited to provide feedback in the creation of the CP strategy. For managers, findings indicate that customer entitlement increases for non-prioritized customers, and customer voice positively exacerbates the link between the strength of the customer brand relationship and customer entitlement. Thus, the reaction of nonvaluable customers must be measured in the development of CP strategies while encouraging customer participation in CP development may be inadvisable.