Improving customer satisfaction and building customer loyalty continue to be major challenges for marketers of retail and other services.  A prerequisite of effective customer satisfaction and loyalty strategies remains a thorough understanding of the process of customer service evaluations.  For more than two decades, the expectancy–disconfirmation paradigm, which suggests that consumers compare the perceived performance of a product or service with their expectations (a focal-object referent) when they form postconsumption satisfaction evaluations, has been the dominant framework in customer satisfaction and service evaluation research.  Even though some studies examine alternative comparison standards, general attention has remained centered on the focal object in question.  However, evidence to support the premise that consumers’ outcome evaluations are shaped by comparisons to multiple reference points appears across the disciplines of consumer behavior, social psychology, behavioral decision, and organizational behavior.  Most notably, these studies identify two other types of “referents”: other-object and self-based.  An other-object referent refers to the perceived performance of an alternative that a consumer compares with the focal object, whereas a self-based referent refers to a self-image theconsumer compares with the image (or symbolic value) of the focal object. 

This study examines multiple reference effects by incorporating other-object and self-based referents in the process of customer service evaluations.  Specifically, it assesses the additional and relative contributions of other-object and self-based reference effects, as well as their interaction, on consumer satisfaction and commitment evaluations after accounting for the effect of the focal-object referent.  The proposed framework of multiple reference effects in service evaluations integrates insights from regret theory, the investment model of interpersonal relationship, and self-image congruity theory.  Consumers’ subjective judgments of the focal-object, other-object, and self-based comparisons are captured through the constructs of disconfirmation, alternative attractiveness, and self-image congruity, respectively.

An empirical study of a hairstyling service confirms that comparisons involving other-object and self-based reference points contribute significantly to consumer service evaluations even when the effect of disconfirmation is controlled.  Among the three reference effects, self-image congruity has the most significant impact on both customer satisfaction and commitment judgments.  However, the relative impact of alternative attractiveness varies across service evaluations, with a significant effect only on customer commitment.  In general, the results suggest that the negative effect of alternative attractiveness on both customer satisfaction and commitment becomes weaker as the level of self-image congruity increases, so that as long as consumers find a good fit between their self-image and the service image, they are less likely to consider alternative services.  However, for consumers with high self-image congruity with the focal service, the presence of an attractive alternative may induce them to enhanceor “play up” their biasin judging their satisfaction with the focal service.

Several managerial implications for service practices can be offered.  First, service marketers should understand that consumers consider multiple referents related to the focal service, other services, and themselves when they make service evaluations.  Failure to consider multiple referents may lead service providers to underestimate the likelihood of defection among satisfied customers or overestimate the defection rate among dissatisfied customers and thus misallocate customer retention resources.  Second, service firms that attempt to achieve a sustained competitive advantage need to monitor or even influence their customers’ perceptions of the attractiveness of close competitors.  For example, an incumbent service provider could ridicule rivals’ performance in comparative advertising to reduce their attractiveness (and customers’ regret); other service providers could increase the feeling of regret among customers who have not chosen their services by demonstrating their favorable performance as a foregone alternative.  However, distorting consumers’ perceptions of the attractiveness of alternatives likely will not work in the long run, particularly if customers can learn more positive information about alternatives from other sources.  Service firms would be better off creating positive barriers such as building close interpersonal bonds and achieving a high level of self-image congruity with their customers.  As the findings suggest, when customers’ self-image congruity is high, their attention to alternatives may diminish, and a play up bias may be induced.  Third, the stronger impact of self-image congruity calls for greater attention to desirable firm images in service and retail environments.  Marketers and retailers should create advertising and promotional messages to elicit psychological appeals and emotional responses that help link their services to customers.  Messages that emphasize the person who visits the shop, such as “they are like me” or “they are what I would like to be,” should be considered.