It’s All Relative: How Customer-Perceived Competitive Advantage Influences Referral Intentions. Marketing Letters

Martin Mende, Florida State University
Scott A. Thompson, University of Georgia
Christian Coenen, Zurich University of Applied Sciences

Better understanding the mechanisms that influence customer intentions to spread positive word-of-mouth (WOM) is crucial to both marketing scholars and managers. This multi-method research contributes to marketing knowledge by revealing how a firm’s customer-perceived competitive advantage (CPCA) influences positive WOM intentions. Analyses of (i) cross-sectional survey data on bank customers in Germany and (ii) experimental data on customers of car insurance companies in the US reveal two crucial insights. First, CPCA influences WOM intentions in both industries, over and above numerous established antecedents of customer loyalty (e.g., satisfaction, trust, perceived value). Second, this research demonstrates a robust and pervasive CPCA-by-satisfaction interaction effect, such that the influence of CPCA on WOM intentions increases as customer satisfaction decreases. The results show that customer-perceived competitive advantage plays an important role in shaping WOM intentions, especially among less satisfied customers. Theoretical and managerial implications of these findings are discussed.

* Martin Mende, Scott A. Thompson, and Christian Coenen. 2014. “It’s all relative: how customer-perceived competitive advantage influences referral intentions” Marketing Letters.