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Minimizing The Ratchet Effect: Why Reciprocity Preserves Customer Satisfaction In Service Environments, Kyle A. Huggins, Val Larsen

Association of Marketing Theory and Practice Proceedings 2023

This paper focuses on a fundamental problem for marketers: the ratchet effect. The ratchet effect occurs when actual service performance is perceived to be significantly higher than service expectations, causing dissonance and resulting consumer guilt. If left unattended, consumers relieve their guilt by increasing the perceived state of expectations for subsequent visits. Known as the ratchet effect, this causes a dilemma for the service business as they consistently strive to improve service performance. Using equity theory, our experimental study explores whether businesses can break the ratchet effect by providing mechanisms of reciprocity for consumers to respond at little or no …