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Consumers' relationships with brands are not all that different than relationships with people. Some you genuinely care about….others are in your life because you need them.
For marketers, understanding the difference between the two kinds of relationships is essential to making sure you know how to deal with customers.
Marketers who realize this will be in a better position to retain customers and improve the perceptions of consumers who are unhappy with a brand’s service or product, according to researchers who recently studied the phenomenon.
In one kind of consumer/brand relationship, people relate to the brand based primarily on economic factors. Walmart, for example, attracts customers based on price and value. In what the researchers call a "communal relationship," consumers relate to the brand based on caring, trust and partnership. State Farm, for example, sells itself as a "Good Neighbor."
How consumers react to experiences with the brand, both positive and negative, depend on how they related to the brand in the first place, researchers said.
Pankaj Aggarwal, a marketing professor at the Rotman School of Management at the University of Toronto Scarborough, and Richard Larrick of Duke University, recently tested brand evaluation after an unfair transaction. The results depended heavily on whether the consumer was in an exchange relationship with the brand or a communal one.
In the first study, Aggarwal and Larrick set up a situation in which the consumer didn’t get what they paid for and wasn’t remunerated for a mistake made by the brand. When customers were treated with respect and dignity after the mistake, those who had communal relationships with the brand responded well, possibly because it reassured consumers about the caring nature of their association with the brand.
In fact, concern from the brand acted as a form of compensation in itself. However, this effect wasn't found when consumers' relationship with the brand was based mostly on price and value.
In that case, if the consumers didn't think they got their proverbial money's worth, good customer service didn't move them to reconsider their negative evaluation of the brand.
However, things change when there is no problem that needs to be addressed with the customer.
Ironically, respectful and fair treatment by a company means more to those who choose a brand based on value than to those who have an emotional relationship with a company. The researchers think this may be because the brand has already met the expectations of those in an exchange relationship — the consumer got what they paid for — good and respectful treatment goes above and beyond. For those in communal relationships, who were already expecting to be treated positively, the same treatment doesn't have as much of an effect.
"Adverse outcomes happen sometimes. People are treated badly or a product fails," Aggarwal said. "Marketers must understand the type of relationship that they have with the consumer so they can figure out how to make good that unfair outcome."
The "right" response to correct a brand's transgression depends on the relationship the brand tries to build with consumers. For example, a sincere apology letter may work in a communal relationship, whereas a refund or discount would be advisable in an exchange relationship.
The study, "When consumers care about being treated fairly: The interaction of relationship norms and fairness norms," will be published in an upcoming issue of the Journal of Consumer Psychology.