Magazine article Journal of Services Research

Exploring the Dimensions of Customer Experience and Its Impact on Word-of-Mouth: A Study of Credit Cards

Magazine article Journal of Services Research

Exploring the Dimensions of Customer Experience and Its Impact on Word-of-Mouth: A Study of Credit Cards

Article excerpt

INTRODUCTION

The infusion of technology into services is radically changing the premises of delivering value to the customer. Like recent technological advances coupled with increasing global competition, the number of enabling tools to acquire possession of products both offline and online has also increased. For instance, plastic money has enabled customers to buy products anywhere/anytime. Since carrying cash is a burden for consumers, now-a-days they rely more on "plastic money", i.e. debit cards and credit cards which is convenient mode of carrying money (Phau and Woo, 2008). A credit card (CC) is a payment mechanism that enables the holder of the card to purchase goods or services without parting with immediate cash and make payment at the end of a specified period with a provision of spreading this payment over several easy instalments.

In India, the CC service formally introduced about 25 years ago has witnessed a rapid growth in the late 80s and early 90s with an increasing number of banks offering CC facility (Khare, Khare and Singh, 2012). Development in the CC took place as more and more institutions are willing to accept them in place of cash and more consumers find the concept to be a convenient mode of making payments. More than any other industry, customers' of financial services want to trust and remain loyal and good services go a long way toward achieving this, but a bad service can quickly validate their fear. Unfortunately, the latter scenario seems to be playing out in today's credit card market. As compared to countries such as China, Saudi Arabia, and Turkey CC use in India is slow to catch (Khare, Khare and Singh, 2012). Further IIF Committee (2012) in its survey on "Market Best Practices: Principles of Conduct and Best Practice Recommendations', found usage of credit card quite less compared to debit card usage. On an average, annual number of transactions per credit card in India stands at eleven ( IIF 2012) as consumers have shown reluctance to make their payments through credit cards due to risk concerns. Perceived risk, lack of awareness and technological development are posited as prominent barriers to consumer usage of plastic money (Chahal, Sahi and Rani 2014; Pavlou, 2001) leading to slow growth of CC service and vis-àvis affecting service experience (Chahal, Sahi and Rani, 2014). No doubt, e-services are increasingly being made available to consumers, however little is known about how consumers evaluate them for potential adoption (Hamid and Cheng, 2013). Even in context to CC services, customers' do not have favourable experience, which might affect their word-ofmouth (WOM) behaviour. Constant bad experiences create suspicion among the customers, which ultimately brings down their loyalty and due to this reason fortunes of the credit card industry in India have changed dramatically. Indian card industry is now facing more disruption than it has seen in earlier decades.

Although management literature reveals much research on credit card use and ownership in economies like China, Hong Kong, South Korea, Sri Lanka, and Saudi Arabia but its relationship with service experience is yet not explored. And in context to India, research on credit card is quite limited and is primarily focused on the influence of factors such as usage patterns, age, gender, income supplementary services and life style on customers' attitude towards credit card (Chahal, Sahi and Rani, 2014; Gnanapushpam, 2007). The literature also reveals that no research has yet been conducted to understand customers' predisposition towards regular use of credit cards. Hence, little is known about how consumers evaluate CC service experience for potential adoption and how it affects their word-of-mouth communication.

Taking into consideration the present situation of credit card companies in India there is need to work on customer experience in context to this industry. Therefore, the objectives of present study are two-fold; first, to examine the dimensionality of customer experience (CE) in context to credit card industry and second, to assess the impact of credit cardholders' experience on their word-of-mouth (WOM) communication. …

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