How the Big 5 personality traits influence
the effect of customer experience
June 2018 by Job van Alphen 10732942 Research supervisor Dhr. Drs. Ing. A.C.J. MeulemansUniversity of Amsterdam
Amsterdam Business School2
Statement of Originality This document is written by Job van Alphen who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents. Signature: Job van Alphen
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Acknowledgement
Before starting I would like to direct a word towards everyone that has helped me through my college years and especially to the ones that have helped me finish this thesis. First of all I thank my supervisor Dhr. Drs. Ing. A.C.J. Meulemans for always giving positive feedback and playing a very supportive role during the creation of this whole thesis. This gave me the boost that I needed in times that I was willing to drop the hard work. Next to this he was able to come up with insightful ideas that have helped me a lot whenever I got stuck on a subject.Subsequently I would like to thank my family and friends that kept me motivated and focussed on completing. They have helped a lot by giving feedback and by generating respondents for the survey, to whom I would speak my last word of thanks. Without them I could not have finished this thesis successfully.
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Abstract
This study aims to examine to what extent the “Big five” personality traits (Openness, Conscientiousness, Extraversion, Agreeableness, Neuroticism) affect the way different experiences are interpreted resulting in different types of consumer loyalty. Despite the marketing possibilities that can emerge from this subject, limited research has yet been done. This all the while more and more information about consumers is becoming available for companies and thus marketing managers. This study will give insight on this matter by analyzing the results of a survey that has reached 107 respondents. Based on a literature study each personality type will be measured against the type of experience that is most likely to give a significant outcome. Results show that from the Big 5 personality traits only a significant positive correlation between conscientiousness and the impact of physical moments in the value chain could be supported. Furthermore the study finds, as opposed to what was to be expected, a lack of significance between the effect of other personality traits on the relationship between customer experience and customer loyalty in order for it to be statistically supported.
Even tough, the research provides both practical and theoretical implications. Those present themselves in the way of additional insights in the effects of personality characteristics and experiences on brand loyalty, contributing to the current marketing strategy literature.
Key words: Physical and emotional involvement experiences, Personality traits, Loyalty, and marketing.
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Content
1. Introduction 6 2. Literature review 8 2.1 Customer loyalty 8 2.2 Customer experience 10 2.3 Big 5 personality traits 12 3. Conceptual models and hypotheses 15 4. Methodology 18 4.1 Research design and sample 18 4.2 Statistical procedure 20 5. Results 21 5.1 Reliability check 21 5.2 Correlation analysis 21 5.3 Regression analysis and hypotheses check 22 6. Discussion and conclusion 24 6.1 Theoretical and practical implications 24 6.2 Limitations and further research 25 7. References 27 8. Appendices 29 8.1 The total experience process 29 8.2 Survey (Dutch) 30 8.3 Demographics 326
1. Introduction
Due to the current environment of fast market competition (globally as well as locally) managing customer loyalty has emerged as one of the main challenges for managers. Since customers (and preferable loyal ones) are needed in order to create and sustain a profitable business and create a competitive advantage. One that can be achieved by implementing the right marketing methods. Rewards generated by loyalty are cumulative and of long term, loyalty thus leads to a rise in customer lifetime value (CLV) (Reichheld, 1993; Dick & Basu, 1994; Lemon & Verhoef, 2016). A lot of research has already been done on the possibilities that customer experiences offer in the generation of loyal customers. Experiences can be good, bad or indifferent but are always present whenever a service or product is bought (Berry, Carbone & Haeckel, 2002; Verhoef, Lemon, Parasuraman, Roggeveen, Tsiros & Schlesinger, 2009; Moe & Schweidel, 2012).
There are many ways to classify different customer experiences; Arnould & Price (1993) make a differentiation based on the level of extraordinary of the experience itself. They found that the level of ordinary lies on the perception of the consumer and that older people more often favour good ordinary experience over extraordinary ones. Ass opposed to Pine & Gilmore (1998) who divide experiences into four different realms based on two dimensions; level of consumer participation (passive and active) and the size of connection with the environment (absorption and immersion). Since customers these days interact with firms by the means of different myriad touch points in multiple channels and media, and customer experiences are nowadays more social in nature, Lemon and Verhoef (2016) divided the total customer experience in to a journey that passes through tree different stages; the prepurchase-, purchase- and postpurchase stage. This allowed them to create an integrated view of customer experience across the total customer journey, bringing together what is known about customer experience and the overall customer journey from many aspects of marketing, such as customer management, customer satisfaction, relationship marketing, and service quality.
When going through these articles it became clear that in order to create the optimal customer experience, different strategies work best for companies in different types of situations and no single strategy seemed to be the optimal one. Furthermore it seemed that the type of personality that different customers posses was almost considered to be
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irrelevant by earlier research. This al the while new technologies such as real-time experience tracking (RET) allow companies to gain a better insight in their customers than ever before. The main benefit of RET is that the gained insights can be acted on immediately. This presents a great advantage for marketing campaigns that are conducted in fast- changing environments (Macdonald, Wilson, & Konus; 2012). If companies can use their improved customer insight in order to determine what type of personality their customers posses. They might be able to create a personal edited experience that suits the consumers personality type best.
However, a knowledge gap still exists between the personal traits on which these experiences are encountered and how different types of persons might prefer different experiences. That is what is sought to be understood by implementing this research, leading to the research question; “How do the big 5 personality traits influence the effect of different experiences on customer loyalty?”.
According to Van den Driest & Weed (2014) the majority of the marketing organizations structures are far behind when it comes to actively generating customer engagement. This while the marketing capability of businesses has a higher influence on business performance when compared to for example: operations capabilities and research and development (Krasnikov & Jayachandran, 2008). This study will aid marketeers in making the right marketing decisions in order to generate the highest customer loyalty, using a quantitative study on the influence that the big 5 personality traits have on the relationship between customer experience and customer loyalty.
The next section provides a theoretical framework in which more meaning will be given to the concepts of customer experience, customer loyalty and the big 5 personality traits leading to the hypotheses (in chapter 3). Moreover, in the methodology, the research design used for this research is explained. Thereafter, gathered results from the research will be presented, followed by the final discussion and conclusions where the findings of this paper will be summarised. Lastly recommendations for further research will be presented.
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2. Literature Review
In order to conduct well-founded and valid research, the concepts discussed as well as their interrelations need to be clear. Therefore this section will provide a clear and structured theoretical framework regarding the research question; “How do the big 5 personality traits influence the effect of different experiences on customer loyalty?”. There are three key concepts implemented in this research; first the concept customer loyalty is presented, followed by the concept of customer experience and finally the big 5 personality traits will be discussed.
2.1 Customer Loyalty
The first definitions of customer loyalty were originally focused on the behaviour that customers show regarding specific brands, like repetition of purchases over time (Tucker, 1964; Pritchard, 1992). Nowadays most researchers suggest that customer loyalty contains more than just a behavioural dimension, however sometimes researchers still choose to measure solely using this factor. One of the main authors against this statement was Day (1976), who argued that customer loyalty also contains a factor in which consumers assess the quality and benefits of competing firms. This factor is now known as the attitudinal dimension that is now often combined with the behavioural dimension to calculate the level of customer loyalty making it two- dimensional (Day, 1976; Dick and Basu, 1994).
According to Reichheld (2001, p.10) customer loyalty is more vital than ever and should be seen as a central measure of success instead of just a driver of profits and growth. When companies succeed in generating customer loyalty, revenue and market share rise. This is because profit created through increasing loyalty is long term and cumulative, this is because companies can make more profit of each individual customer if they show longer lasting loyalty (Reichheld, 1993). It is safe to state that the reason one competitor is more successful than another can, more often than not, be explained by economic benefits generated from customer loyalty. Customer loyalty can thus be seen as a foundation for creating a sustainable competitive advantage, one that can be partly achieved through marketing efforts. This might explain why in the current market environment of rapid market penetration and highly innovating products combined with maturity conditions of the
9 market, managing loyalty is emerging as a top priority managerial challenge (Dick & Basu, 1994).
Just adding product features is not enough to generate higher customer loyalty. A total positive customer experience should be provided; this can be accomplished by making investments in pay and appreciation of employees. This will generate a higher job satisfaction and retention rate. The combination of more satisfied, experienced and knowledgeable personnel will lead to a better customer service, and higher quality products resulting in higher customer loyalty (Reichheld, 1993).
According to Zeithaml, Berry & Parasuraman (1996) generating a better service quality will indeed lead to an increase in favourable consumer behaviour. Their study shows the importance of consumer focused strategies; this means trying to meet the service level that the consumer desires instead of performing at service levels that are found to be just acceptable. However, this should still be done in a cost-effective way, especially if companies strive to perform above the desired-service level since that is when the costs are rising extensionally.
There is still discussion as how to best describe the definition of loyalty. Newman and Werbel (1973) for example describe loyalty as “the brand or store that consumers will think of first when they need to make a decision on where to go or what to buy”. Whereas Ostrowski, O’Brien, and Gordon (1993) argue that loyalty is best conceptualized as the first choice of the consumer amongst other product or services. Furthermore Dick and Basu (1994) describe a loyal customer as one that is not actively seeking or considering other brands or firms when purchasing items. Oliver (2014) describes loyalty as a “deeply held psychological commitment to repurchase a product or patronize a service in the future despite obstacles or disincentives to achieve the consumption goal”. This is the definition that will be used in this paper.
Dick & Basu (1994) conceptualise loyalty based on two dimensions relative attitude and repeat patronage. Repeat patronage is measured as the likelihood that a customer consciously buys a product or uses a service again, not to be confused with purchase repetition, which is the consequence of random events (Oliver, 2014). Relative attitude is used as an appraisal function of an object. It basically measures the favourability of an item; this is however explicitly not linked to actual purchases since subjects can posses a higher
10 attitudinal extremity directed at other brands. Relative attitude is therefore more likely to correctly indicate repeat patronage when it is measured and compared with different brands as apposed to being measured in isolation. However this research focuses on the overall improvement of loyalty when different personality types face different experiences, therefore relative attitude will be measured independently. This makes the result applicable for all companies, if they have a clear picture of the personality of their consumers. Together this allows for the creation of a framework with four sectors: no loyalty, spurious loyalty, latent loyalty and loyalty.
A low repeat patronage in combination with a low relative attitude towards the brand / company is an indicator for a lack of loyalty. Whereas a high repeat patronage combined with a low relative attitude signifies spurious loyalty (Table 1). This is present when customers repeat purchases under different situations without noticing differentiation among different suppliers. Latent loyalty is the result of a low repeat patronage accompanied by a high relative attitude. High repeat patronage with high relative attitude indicate the most favourable of the four dimensions of loyalty (Dick & Basu, 1994). Table 1: The four dimensions of loyalty (Dick & Basu, 1994) 2.2 Customer Experience Currently marketing management main point of focus is creating long lasting and engaging experiences for customers. The Customer Experience (CE) concept originally comes from the word “experience” that has advanced over time. So in order to fully understand the concept of CE first the interpretation of the word experience needs to be clear.
One of the least complex definitions of experience would be “the memory of an event in ones mind”. This event can be recent but also have taken place a long time ago. Since an experience is a mental phenomenon, it is deprived from the physical needs that goods serve or the need to solve intellectual or material problems that is accomplished by
Repeat Patronage
High Low
Relative Attitude High Loyalty Latent Loyalty Low Spurious Loyalty No loyalty
11 services. An experience happens within the mind of the consumer and how the experience is felt can be determined by outside stimuli. Mental needs in the form of un-stressing and self- realization are examples of stimuli that can affect the way experiences are lived. These determine how people remember certain experiences (Sundbo and Sørensen, 2013, p.3). From this definition of the word experience, the term customer experience can be derived as the memories that customer generate while making a purchase or utilizing a service. Momentarily there is still a discussion going on about the best definition of customer experience. One description of the concept of customer experience is provided by (LaSalle and Britton (2003) who state that CE is; “a holistic experience, which involves a person as a whole at different levels and in every interaction between such person and a company, or a company’s offer.” Using this definition they focus on the fact that the total effect of the complete experience that is offered, has a greater effect on people than just the sum of all experiences combined (LaSalle and Britton, 2003; Mattila and Wirtz, 2008).
Gentile, Spiller and Noci (2007) found that a customer experience is generated as a consequence of different interactions between a customer and a firm or product. These interactions cause reaction within the consumer that are personal and thus different between consumers. This definition is different from the one of LaSalle and Britton (2003) and Mattila and Wirtz (2008) as it accounts for specific moments and does not suggest that the combined impact of these moments is bigger than when they are separated.
Grewal, Levy, & Kumar (2009) see customer experience as: “every point of contact at which the customer interacts with the business, product or service”. They account for the fact that a complete customer experience consists of various moments of interaction. However, they do not look for synergies between them.
For this research; the total customer experience consists of all the different interactions on all levels between a customer and a company or product also known as the customer journey. Customer experience is created when companies generate value for the customers during different interactions along the customer journey. These interactions will lead to different customer reactions that are personal and often dependable on the level of involvement the customer has with the company. In order to optimise the customer experience it is necessary for companies to understand why and how their customer move from one touch point to the next (Mascarenhas, Kesavan & Bernacchi, 2006; Verhoef et al.,
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2009). Accomplishing an optimal customer experience is more than just generating high customer satisfaction since a satisfied customer is still able to defect to other brands.
Mascarenhas, Kesavan & Bernacchi (2006) define an optimal customer experience as a “totally positive, engaging, enduring, and socially fulfilling physical and emotional customer experience across all major levels of one’s consumption chain”. This definition can be described in two distinguished categories; physical moments and emotional involvement moments, these can both be found in each different moment along the value chain. These different value chain moments can be categorised into four different stages of the experience; searching, finding, using and post-usage. It is of importance to look at different moments along all stages of the experience (Mascarenhas, Kesavan & Bernacchi, 2006). This is the definition that will be used in this paper since it allows to divide the total experience and measure the effect of different individual moments (the total experience process table can be found in appendix 1). A downside of this model is that the way that these different categories are perceived might still depend on the environment and personal characteristics of the consumer, since everyone has their own perceptions often formed through their own environment, leading to different reactions from different people (Moe & Schweidel, 2012). What makes it even more difficult is that we find ourselves today more and more in a multi- or even omnichannel environment, where customers can interact with firms through myriad touch points, a lot of information is available and fast changes are inevitable. In order to provide the optimal customer experience companies will have to study their consumer’s latent needs, understand them and serve them in an effective manner (Lemon & Verhoef, 2016). Even then there is a chance that the outcome as perceived by the consumer differentiates from what the company intended, since it is very hard for companies to fully control the offered experiences (Moe & Schweidel, 2012). This is what makes it so important to fully understand your customers and their needs along different stages of the total customer experience, personally adjusting it for different types of people.
2.3 Big 5 personality traits
Before the different personality traits and their characteristics can be measured and examined, a clear statement of its definition needs to be provided. The current definition of the Big Five personality traits is the consequence of decades of research that has been done
13 in order to define and explain differences in personality. This research started in 1932 when McDougal suggested that; "Personality may to advantage be broadly analysed into five distinguishable but separate factors namely intellect, character, temperament, and disposition" The next attempt to organize personality was presented by Cattell (1943), who had developed a complex system that was based on 16 different factors. However researchers later found his work hard to replicate whereas the older 5-factor model did a better job at accounting for the data. Norman (1963) was the first one to eventually modify the old labels of the 5-factor model of McDougal to the ones that are found in today’s literature. These traits are now known as the Big Five; openness, conscientiousness, extraversion, agreeableness and neuroticism. In more recent years more and more research seems to be accumulating that supports the successfulness in which the 5-factor model accounts for differences in personality (Barrick & Mount, 1991). Individuals can present all five of these traits and score higher on one or several in comparison to others. It is important to understand that the traits are called “Big” Five in order to emphasize the fact that the traits are still very broad as opposed to it being the only five traits that exist among people (Goldberg, 1993; John & Srivastava, 1999, p. 102).
Openness, or openness to experience is linked to intellect and imaginative people, and is used to determine to what level people are open to new suggestions. People who score high in openness to experience tend to be more independent minded as well. The opposite of openness to experience is closeness to experience (Goldberg, 1990; John & Srivastava, 1999, p. 105; Judge, Higgins, Thoresen & Barrick, 1999).
Conscientiousness measures the amount of goal directed behaviour and perseverance an individual contains. People who score high on this trait are likely to be consistent, organized and dependable. They are also found to be more orderly and responsible as opposed to people that posses a different trait. Lack of direction is seen as the contrary of conscientiousness (Goldberg, 1990; John & Srivastava, 1999, p. 105). Extraversion is used as a measurement of the comfort in which people interact with others. Traits associated with extraversion are; social, kind, hard working and caring (McCrae & Costa 1987; Goldberg, 1990). People who score high on the extraversion trait also tend to be more energetic that others. The inverse of extraversion is introversion (John & Srivastava, 1999, p.105).
14 Big 5 personality traits Agreeableness distinguishes people who are: trusting, cooperative, and likable (John & Srivastava, 1999; Judge et. al., 1999). They tend to be straight and helpful therefore making people with high agreeableness good in social interactions. Polar to agreeableness stands antagonism (McCrae & Costa 1987; John & Srivastava, 1999, p. 110).
Neuroticism is linked with traits as emotional, insecure, angry and anxious. People who score high on neuroticism are susceptible to being temperamentfull, unreasonable and have low level of coping with others (McCrae & Costa 1987; Goldberg, 1990; Barrick & Mount, 1991). They are also found to be unstable and often easily upset. Emotional stability is seen as the opposite of neuroticism. (John & Srivastava, 1999, p. 110)
Combining the information stated above allows for the creation of the conceptual model that is provided below (Fig. 1). The framework graphically aids to create a better understanding into the dynamics of this research. Fig. 1; Model of the interrelations between the concepts; customer experience, customer loyalty and the big 5 personality traits. In the next chapter hypotheses concerning the shown interrelations will be presented and the main underlying constructs will be more clearly defined. Furthermore examples will be given on how these hypotheses where tested. Customer Experience Customer Loyalty Value chain moments - Physical moments
- Emotional involvement moments
Repeat patronage Relative attitude Openness Conscientiousness Extraversion Agreeableness Neuroticism
15 Openness to experience H1 +
3. Conceptual models and Hypotheses
In this section different hypotheses will be drafted based on the literature review presented above. The combined aim of these hypotheses is to give a clear answer on the main research question; “How do the big 5 personality traits influence the effect of different experiences on customer loyalty?”. In order to do so each type of effect that a personality trait is likely to cause will need to be examined and clarified with a conceptual model, starting with openness to experience.Openness to experience often being used as a measurement of the tendency of people to be more open minded towards new ideas and linked with the level of curiousness as opposed to cautiousness. People that score high on the openness to experience trait are found to be more trusting as well (Goldberg, 1990; John & Srivastava, 1999). Their trustworthy nature is likely to make them more susceptible for emotional moments along the value chain affecting their attitude and thus increasing or decreasing customer loyalty towards a brand or company as displayed in figure 2 (Dick & Basu, 1994; Mascarenhas, Kesavan & Bernacchi, 2006). Leading to the following hypothesis; H1: Openness to experience positively correlates with emotional involvement moments in the value chain on relative attitude towards a brand / company. Fig. 2; Conceptual model showing the proposed relation between; openness to experience, emotional involvement moments and customer loyalty. Examples of where emotional involvement moments would affect relative attitude towards a brand and/or store would be moments where consumers are exposed to commercials that appeal to them, or the feeling the customers get when interacting with store personnel. Both situations can trigger positive or negative feelings (emotions) affecting the consumers attitude.
Conscientiousness, people who score high on this trait are found to be more dependable than others. This is due to their quality to be very organised and consistent
16 Conscientiousness H2 + making them more reliable (Goldberg, 1990; John & Srivastava, 1999). This personality factor is linked to making people more sensitive for physical experiences having an effect on repeat patronage as conscientious people rely on consistency, therefore influencing the level of customer loyalty as shown in figure 3 (Mascarenhas, Kesavan & Bernacchi, 2006). In order to check this effect the following hypothesis is drafted; H2: Conscientiousness positively correlates with the effect that physical moments in the value chain have on customer loyalty.
Fig. 3; Conceptual model showing the proposed relation between; conscientiousness, physical moments and customer loyalty. Illustrations of how physical moments could affect the manner of repeat patronage would be; the ease of which a (web)-store or service can be accessed, or the quality (and its consistency) of the services and products offered. Where the first situations describes the physical difficulty the customer needs to overcome in order to make the purchase itself, the second situation describes the physical quality of the product or service purchased.
Extraversion expresses to what level people are outgoing indicating the level of comfort people have while interacting with others. These properties make that extraverts find joy in working with others and prefer this to working alone, they also tend to be more trusting (McCrae & Costa 1987; Goldberg, 1990). The susceptibility for interactions make that extraverts are found to be more affected by well executed emotional involvement moments in the value chain leading to higher repeat patronage creating higher customer loyalty as demonstrated in figure 4 (Goldberg, 1990; Dick & Basu, 1994; Mascarenhas, Kesavan & Bernacchi, 2006). The following hypothesis will check this effect:
H3: Extraversion correlates positively with the effect that physical moments have on the likelihood of increased customer loyalty.
17 Extraversion Agreeableness H3 + H4 +
Fig. 4; Conceptual model showing the proposed relation between; extraversion, emotional involvement moments and customer loyalty. Examples of cases when emotional moments could have an influence on repeat patronage would be; the quality of advice that is given in a store, or the way in which customer complaints are handled within a company. Both are capable of triggering emotions within the consumer that are capable of influencing the likelihood of repeat patronage.
The fourth trait agreeableness, also known as likability, this measures the soft- heartedness of people. High scores on this trait are an indication that individuals are likely to be trusting and flexible. These qualities make people good in interactions and maintaining personal relationships with others (McCrae & Costa 1987; John & Srivastava, 1999; Judge et. al., 1999). Their softness and trustfulness makes that people who posses a high degree of agreeableness tend to be influenced more by emotional involvement moments affecting relative attitude, leading to higher customer loyalty as shown in figure 5. H4: Agreeableness correlates positively with the effectiveness of emotional involvement moments on customer loyalty. Fig. 5; Conceptual model showing the proposed relation between; agreeableness, emotional involvement moments and customer loyalty.
Examples of cases where moments with emotional involvement can create an impact on relative attitude would be the levels of trust customers are comfortable in placing in personnel, or the availability of an online platform where consumers can express themselves.
The last trait of the big five is neuroticism. This trait is known to be found in people who are emotionally unstable, easily angered and often have insecurities. Their highly
Emotional involvement moments Customer loyalty
18 Neuroticism H5 - anxious and unstable traits make that they are likely to take discomfort in physical moments within the value chain, decreasing customer loyalty as presented in figure 6 (Goldberg, 1990; Barrick & Mount, 1991; Dick & Basu, 1994). Leading to the following hypothesis. H5: Neuroticism correlates negatively with the effect of physical moments on relative attitude and thus customer loyalty. Fig 6; Conceptual model showing the proposed relation between; neuroticism, physical moments and customer loyalty.
Cases where physical moments might impact the relative attitude towards a brand or company would be; whether or not the delivery of the product or requested service is on time or whether enough personnel is available in store to help everybody in a timely matter.
4. Methodology
This section provides the research method that is used for this thesis. Firstly the research design and sampling method are presented. This is followed by the statistical procedure that was used to examine the found data, which let to the found results. 4.1 Research design and sample For this research a quantitative method is used in order to find an answer on how different personality traits moderate the effect of different experiences to customer loyalty. In order to reach people with a variety of geographical location, education level and age an internet-mediated method will be used. This also allows for a less time consuming research as multiple respondents can answer simultaneously and the surveys do not have to be filled in by hand. The used data was gathered using an online survey (appendix 2) spread among personal contacts via e-mail and social media. The survey was directed towards Dutch speaking residents living in the Netherlands, therefor the questionnaire was written in Dutch diminishing problems with correctly interpreting English questions. The respondents where asked to forward the survey in order to reach a wider population. In addition a lottery for a dinner voucher with a value of 25-euro was started in order to generate a higher response19
rate. Furthermore, the respondents where ensured that their data would be analysed anonymously and the results would remain confident. The survey ended up generating 107 (N=107) respondents all of which completely finishing the questionnaire. No answers where removed as everyone that participated completely filled in the questionnaire. Since the survey was mainly spread and forwarded across social media the response rate could not be measured.
In order to create a picture of the reached respondents three questions concerning demographics (age, sex and educational background) where asked upfront, this made it possible to check if the reached respondents are a good representation of the population. From the final sample of 107 respondents 66.4% where female (N=71) leaving 33.6% to be male (N=36) with a modus of age being between 20 and 30 (38.3%) (N=41) followed by under 20 (26.2%) (N=28). The most common education level (modus) in the sample is HBO (39.3%) (N=42) followed by WO (24.3%) (N=26). Secondly, questions revealing the respondents personality where asked and lastly information on how different experiences affect their loyalty as a customer was gathered. The moderation effect of personality traits between the depended variable customer loyalty and the independent variable customer experience where analysed using SPSS.
The personality traits of the consumers was measured using the Big Five Inventory (BFI) (John & Srivastava, 1999). This measures each personality trait (Extraversion, Agreeableness, Conscientiousness, Neuroticism and Openness to experience). For each item five questions where drafted in the form of “I see myself as someone who is …” and participants had to score themselves based on a 5-point Likert scale ranging from (1) completely disagrees to (5) completely agree. Since this is the best way to handle big data and find correlations, a total of 11 Items where reverse coded in order to improve reliability. For the first trait; extraversion questions as is “is full of energy” and “tends to be quiet” where used. The second trait; agreeableness was measured using items in the form of “is generally trusting” and starts quarrels with others”. Thirdly the dimension; conscientiousness was measured based on items as “is a reliable worker” and “can be somewhat careless”. The fourth trait; neuroticism is checked based on items as “worries a lot” and “is emotionally stable, not easily upset”. Lastly the fifth trait; openness to
20 experience is checked by making use of questions as “is inventive” and “prefers work that is routine”. Next the effectivity of loyalty generating experiences was measured across different moments in the value chain. These experiences where divided in physical moments and emotional involvement moments as proposed by Mascarenhas, Kesavan, & Bernacchi (2006). For both moments ten different scenarios (totalling to 20 scenarios) where drafted concerning either a change in repeat patronage or a change in attitude towards a brand / company. These differences in repeat patronage or relative attitude serve as indicators of changing customer loyalty (Dick & Basu, 1994). The results where measured on a 5-point Likert scale ranging from (1) completely disagrees to (5) completely agrees, 10 of these items where proposed in a negative manner in order to filter for confirming biases. An example scenario of this would be “When products look nicely finished, this positively affects the way I see a brand or company” or “When I have the feeling that my complaints are not heard within a company the chances of me returning there decrease”. Even though the size of customer loyalty can be measured on a two dimensional scale (repeat patronage as well as relative attitude) the results will be measured as a combination of both, so one dimensionally. This is because the goal of this research is to understand how the Big five personality traits influence the interpretation of different experiences resulting in different levels of total consumer loyalty. 4.2 Statistical procedure Data was analysed in SPSS (Statistical software Package for Social Sciences). First of all the data was analysed for completeness, hereafter reverse coded items where transformed. This made it possible to perform the reliability check, after which one item was deleted to improve the Cronbach's Alpha (question 8 in the personality trait analysis). Next new items where created combining questions regarding extraversion, openness etc. in order to perform a correlation analysis. Subsequently a hierarchical regression test was performed to check the ability of different personality types to predict the effect on consumer loyalty.
The following chapter discusses the results and findings of this study and evaluates the hypotheses of the conceptual model.
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5. Results
This chapter will present the results of the analyzing the survey. Starting with the reliability check, followed by a correlation analysis. Lastly a hierarchical regression is done in order to validate the proposed hypotheses. 5.1 Reliability CheckIn order to check for the quality of the used measurements reliability analyses where preformed. Each individual trait and type of experience is measured independently; the results are presented below (Table 2). Table 2: Reliability analysis of personality traits and customer experiences Scale Cronbach's Alpha N of Items Extraversion 0.722 5 Agreeableness 0.572 5 Conscientiousness 0.583 5 Neuroticism 0.702 4 Openness to experience 0.543 4 Physical moments 0.586 10 Emotional involvement moments 0.612 10
The results generated from the reliability analysis show that only the Extraversion and Neuroticism scales score high on the reliability test with a Cronbach’s α > 0.70. The reason that Agreeableness, Conscientiousness and Openess to experience did not reach the desired score of Cronbach’s α > 0.70 might be because of a too low response rate. The BFI framework is the result of decades of research and commonly used among researchers. The experience scales also score below the desired value with a score of Cronbach’s α < 0.70. Luckily all the α’s can still be considered reasonable, with a value higher than 0.50. 5.2 Correlation Analysis In order to examine the relationship between the different variables a correlation analysis was performed. Table 3 presents an overview of its outcomes including means and standard deviations. From the correlation analysis can be interpreted that from the five personality traits only conscientiousness significantly relates to physical experiences (Pearson Correlation coefficient r= 0.23). Furthermore, a significant correlation between
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agreeableness en conscientiousness (Pearson Correlation coefficient r= 0.24), as well as between emotional involvement moments and physical moments) Pearson Correlation coefficient r= 0.67) is found. Table 3: Descriptives and correlations between the key variables Variables M SD 1 2 3 4 5 6 7 1. Agreeableness 3.87 0.55 (.57) 2. Extraversion 3.79 0.60 0.11 (.72) 3. Conscientiousness 3.97 0.55 0.24* -0.01 (.58) 4. Neuroticism 2.67 0.75 -0.13 -0.16 -0.1 (.70) 5. Openness 3.47 0.61 -0.04 0.59 0.53 -0.16 (.54) 6. Physical experience 3.83 0.39 0.06 -0.01 0.23* -0.15 -0.06 (.59) 7. Emotional experience 3.66 0.40 0.01 0.03 0.14 -0.02 -0.05 0.67** (.61) Note: N = 107. Reliabilities are reported along the diagonal. **. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0,05 level (2-tailed). 5.3 Regression analysis and hypotheses check In order to check the proposed hypotheses linear regression tests between the 5 personality traits and their corresponding type of experience were performed. For models 1 and 4 emotional involvement moments was used as the dependent variable (Table 4), as opposed to models 2, 3 and 5 where physical moments were used as dependent variable (Table 5). Table 4: Hierarchical regression model testing the relationship between personality traits and emotional involvement moments β F R² 1. Openness -.045 .209 .002 4. Agreeableness .005 .002 .000 Note. Statistical significance: *p<0.05;**p<0.01;***p
23 Table 5: Hierarchical regression model testing the relationship between personality traits and physical moments H1: Openness to experience positively correlates with emotional involvement moments in the value chain on relative attitude towards a brand / company.
Table 4 shows a small negative effect between openness and emotional involvement moments, but the tested effect is not significant. Therefore hypothesis 1 is not supported.
H2: Conscientiousness positively correlates with the effect that physical moments in the value chain have on customer loyalty.
Table 5 shows a relatively high and positive β-coefficient (.234) indicating a correlation between conscientiousness and physical moments, which is also significant (p<0.05). Therefore we can conclude that hypothesis 2 is supported.
H3: Extraversion correlates positively with the effect that physical moments have on the likelihood of increased customer loyalty.
Table 5 shows a small negative effect between extraversion and physical moment that is not significant. Therefore we can conclude that hypothesis 3 is not supported
H4: Agreeableness correlates positively with the effectiveness of emotional involvement moments on customer loyalty.
A small positive effect is shown in table 4 between agreeableness and emotional involvement moments, unfortunately this effect is not significant and thus is hypothesis 4 not supported. β F R² 2. Conscientiousness .234 6.105* .055 3. Extraversion -.010 .011 .000 5. Neuroticism -.015 .024 .000 Note. Statistical significance: *p<0.05;**p<0.01;***p
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H5: Neuroticism correlates negatively with the effect of physical moments on relative attitude and thus customer loyalty.
A small negative effect between extraversion and physical moments is shown in Table 5, however the significance is too low for hypothesis 5 to be supported. In the next chapter the discussion and conclusions of the results will be discussed further, as well as practical implications and possibilities for further research.
6. Discussion and Conclusion
This section will describe the overall findings of this research and explain its practical implications. Hereafter the limitations of the current research will be discussed and directions for further research will be presented.
6.1 Theoretical and practical implications
The main goal of this study was to prove that people with different personality traits; Extraversion, Agreeableness, Conscientiousness, Neuroticism and Openness to experience would react differently towards different types of experiences (physical moments and emotional involvement moments) and therefor lead to different kinds of loyalty. Previous research already suggested that a link exists between customer experiences and customer loyalty, but the effect of personality traits appeared to be unstudied (Goldberg, 1990; Barrick & Mount, 1991; Dick & Basu, 1994). However when companies know their consumers well, and with the currently growing availability of data they do more often than not. Knowing to what kind of experiences your customers are attracted to might just give you an edge over your competitors. That is what this research sought to help accomplish. After extensive literature study openness to experience was thought to correlate with emotional involvement moments; conscientiousness was expected to positively correlate with the effect of physical moments on loyalty; extraversion was likely to correlate positively with the effect of physical moments as well; agreeableness was thought to positively correlate with the effectiveness of emotional involvement moments on customer loyalty and lastly
25 neuroticism was expected to have a negative relation with the effect of physical moments on relative attitude (McCrae & Costa 1987; John & Srivastava, 1999; Judge et. al., 1999). To test these hypotheses a survey was distributed by the means of social media and personal contacts. A total of 107 respondents where generated through this manner. After analysing the data, results have shown that only conscientiousness is significantly (and relatively highly) correlated with the effect that physical moments have on customer loyalty. Regarding the research question “How do the big 5 personality traits influence the effect of different experiences on customer loyalty?” it can only be stated that for conscientious people physical experiences lead to higher customer loyalty in comparison to other personal traits.
Since no studies have researched these relations before this study contributes to the current theories concerning customer experience and loyalty. A practical implication for companies is found in the benefit that managers are now aware that if their customer is a conscientious one, they know that they have to outperform their competitors especially on physical experiences in the value chain. This way they are able to improve their customer loyalty and generate higher profits from them. 6.2 Limitations and further research The first item limiting this study is that the Big Five inventory test measuring the personality traits is conducted as a self-assessment test. Even though the test is widely used, participants might be inclined to score themselves more positively as opposed to when this assessment would be performed by others. Examples being people scoring themselves high on “the ability to generate a lot of enthusiasm” or low on “laziness”, while outsiders would score them more moderately. Secondly there is no set standard for the personality trait items. Someone might think of themselves as being a “hard worker” in comparison to last year when they didn’t performed optimally, making it an individual rating based on personal background and experiences. Further research will have to deal with these limitations by making for example control groups or creating scales for different trait items, allowing them to be compared.
Furthermore, since little research has covered this subject before; the survey might still need to be optimalised in the terms of measurement. It might be compelling (or even
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necessary) to form more concrete questions regarding the type of experience, as more detailed situations might help to improve the surveys reliability. This is something further research should pay attention to, as it was one of the main problems encountered here. Moreover, customer experience and customer loyalty can be measured and interpreted in very different ways, as they are generally broad variables. In this research a choice was made to check the experience on the basis of physical and emotional value experiences; and the loyalty on the basis of repeat patronage and relative attitude. For further research it will be refreshing to look only at one of the two dimensions of loyalty, so only at repeat patronage or relative attitude and or use other types of measurements for different types of experiences and compare the outcomes. Lastly, this research aimed to find correlations between the personality traits and the effect of different experiences. However correlation is not the same as causation. Therefore it might be interesting for further research to examine the causation effect between these variables. In order to do so a larger sample size will have to be gathered to increase the reliability and significance of the tests.
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7. References
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8. Appendices
8.1 The total experience process table form Mascarenhas, Kesavan & Bernacchi (2006).30 8.2 Survey (Dutch) Demographics: Wat is uw leeftijds categorie? Hoe identificeert u zich? Wat is uw hoogst genoten opleidingsniveau? Big 5 personality traits measured on a 5-point likert scale; 1. Ik zie mijzelf als spraakzaam 2. Ik zie mijzelf als iemand die de neiging heeft om ruzie te maken met anderen 3. Ik zie mijzelf als een inventief persoon 4. Ik zie mijzelf als iemand die zich vaak zorgen maakt 5. Ik zie mijzelf als iemand die soms zorgeloos is 6. Ik zie mijzelf als lui 7. Ik zie mijzelf als een energiek persoon 8. Ik heb graag routine in mijn werk 9. Ik ben soms onbeleefd tegen anderen 10. Ik vind het fijn om met anderen samen te werken 11. Ik heb weinig interesse in kunst 12. Zie mijzelf als een ingetogen persoon 13. Ik zie mijzelf als een ongeorganiseerd persoon 14. Ik zie mijzelf als iemand die snel anderen vertrouwd 15. Ik zie mijzelf als iemand die vaak stil is 16. Ik ben relaxt en kan goed tegen stress 17. Ik ben iemand die snel nerveus is 18. Ik beschouw mijzelf als een nieuwsgierig persoon 19. Ik beschouw mijzelf als een betrouwbare werker 20. Ik zie mijzelf als iemand die doorzet tot die zijn taak gedaan heeft 21. Ik ben een origineel persoon die vaak met nieuwe ideeën komt 22. Ik zie mijzelf als iemand die voor bijna iedereen attent en aardig is 23. Ik zie mijzelf als iemand emotioneel stabiel is, en moeilijk boos te krijgen 24. Ik zie mijzelf als iemand die veel enthousiasme met zich mee brengt Scenario’s of experiences leading to customer loyalty; 25. Wanneer producten er mooi afgewerkt uitzien heeft dit een positief effect op de manier hoe ik een merk zie 26. Wanneer een product veel onderhoud vergt verkleint dit de kans dat ik meer van dit soort producten zal aanschaffen 27. Wanneer ik het gevoel heb dat er weinig met mijn klachten wordt gedaan verkleint dit de kans dat ik terugkom 28. Een te kleine “brand-community” heeft negatieve invloed op hoe ik over een merk denk 29. Wanneer er een verrassing element bij de levering van een product zit heeft dit een positief effect op de manier hoe ik een merk zie 30. Wanneer er geen garantie op een product zit heeft dit een negatieve invloed op hoe ik over een merk denk 31. Wanneer ik het gevoel heb dat personeel niet mee denkt over oplossingen bij een probleem heeft dit een negatieve invloed op hoe ik over een merk denk
31 32. Een goede interactie met personeel heeft een positief effect op de manier hoe ik een merk zie 33. Een duidelijke internet website vergroot de kans dat ik deze vaker bezoek 34. Goed advies van medewerkers vergroot de kans dat ik terugkom in de winkel 35. Wanneer een product niet mooi is verpakt verkleint dit de kans dat ik nog iets zal aanschaffen 36. Wanneer een product te laat wordt geleverd heeft dit een negatieve invloed op hoe ik over een merk denk 37. Wanneer een winkel makkelijk te vinden is (op het internet of in het echt) vergroot dit de kans dat ik hier terugkom 38. Wanneer ik mijzelf niet kan op een sociaal platform kan uitten over een product heeft dit een negatieve invloed op hoe ik over een merk denk 39. Wanneer reclames mij aanspreken spreken heeft dit een positief effect op de manier hoe ik een merk zie 40. Wanneer een product van goede kwaliteit blijkt vergroot de kans dat ik meer producten van dit merk zal kopen 41. Wanneer er voldoende personeel is om iedereen te helpen heeft dit een positief effect op de manier hoe ik een merk zie 42. Wanneer een winkel moeilijk te bereiken is verkleint dit de kans dat ik hier terugkom 43. Wanneer er goed met mijn klachten wordt omgegaan vergroot dit de kans dat ik hier vaker kom 44. Negatieve recensies over een merk verkleinen de kans dat ik meer producten van hun zal kopen Extraversion: 1, 7, 12R, 15R, 24 Agreeableness: 2R, 9R, 10, 14, 22 Conscientiousness: 5R, 6R, 13R, 19, 20 Neuroticism: 4, 16R, 17, 23R Openness: 3, 8R, 11R, 18, 21 Physical moments on relative attitude: 25, 28N, 30N, 36N, 41 Physical moments on repeat patronage: 26N, 33, 37, 40, 42N Emotional moments on relative attitude: 29, 31N, 32, 38N, 39 Emotional moments on repeat patronage: 27N, 34, 35N, 43, 44N R = reverse coded N = negatively
32 8.3 Demographics
