KOREASCHOLAR

This research investigates the negative consequences of offering preferential treatment to consumers. We demonstrate that offering preferential treatment builds up consumers’ feelings of entitlement, which increases consumers’ intention to retaliate against the firm when such treatment is terminated. This effect, which generalizes across a variety of shopping contexts and types of preferential treatment, is shown to be moderated by some specific features of the offer: repetitiveness, regularity, and value. Finally, we explore the relationship between consumer entitlement and consumer gratitude. Specifically, we find that boosting feelings of gratitude by reminding consumers that other firms do not offer similar preferential treatment to their customers attenuates the effect of consumer entitlement on consumer retaliation intention. Taken together, our findings provide actionable insights on how to design preferential treatment that will not backfire.

• Yi Li(Macquarie University, Australia)
• Elena Fumagalli(HEC Paris, France)