Boosting customers’ hedonic well-being through fair services: the role of participation and price saving

Abstract

Purpose Although close customer–company interactions are essential sources of value creation, their effect on well-being, depending on fair treatment by the service employee, has not been established. This research identifies two customer-centric, proactive, market orientation strategies that might accelerate the positive effects of fairness perceptions in service encounters. Design/methodology/approach Two experimental studies investigate if customer participation and price savings can boost the positive effects of fairness or compensate for the negative influence of unfairness, through customers’ word of mouth, on hedonic well-being. Findings The results show that high levels of customer participation can boost customers’ well-being, but monetary compensation in the form of price savings cannot offset low fairness experienced during the service encounter. Service firms benefit directly from increased word of mouth when customers perceive high fairness; customers benefit indirectly from increased hedonic well-being. Originality/value This research contributes to academic debates about the extent to which transformative services contribute to consumer well-being. By linking service fairness perceptions to value co-creation and well-being, it also advances research on power distribution in service ecosystems. Finally, this study contributes to services literature by identifying customer participation as a feasible way to increase consumers’ hedonic well-being.