Is Being Good Better Than Being Cheap, Or Is Being Cheap Better Than Being Good?

Havard Hansen, Norwegian School of Management
Bendik M. Samuelsen, Norwegian School of Management
Bengt G. Lorentzen, Norwegian School of Management
ABSTRACT - An assumption in the literature on defensive customer retention strategies is that customers who receive poor service quality from their current supplier are more inclined to switch to an attacking supplier. However, what to communicate to trigger switching from existing supplier to a new, previously unknown supplier is less known in this literature. This paper investigates how attacking firms can design persuasive advertising messages aiming to capture competitors’ customers. In a 2 x 2 factorial experiment we find that economic advertising appeals are more persuasive than appeals stressing service quality for subjects currently receiving poor service quality. For customers who perceived service quality to be satisfactory, there was no difference in persuasiveness between the different appeals.
[ to cite ]:
Havard Hansen, Bendik M. Samuelsen, and Bengt G. Lorentzen (2004) ,"Is Being Good Better Than Being Cheap, Or Is Being Cheap Better Than Being Good?", in NA - Advances in Consumer Research Volume 31, eds. Barbara E. Kahn and Mary Frances Luce, Valdosta, GA : Association for Consumer Research, Pages: 446-450.