In today’s burgeoning platform-based business landscape, firms frequently outsource major components of their services to third-party providers. This shift makes it crucial to understand how a firm’s actions impact customer experiences at these third-party touchpoints. This research aims to explore the impact of a firm’s signaling interventions, through badges, on the spillover of customer experience evaluations from third-party providers to the firm, within the context of access-based services.
This study used a multiphased experimental approach through four distinct studies, whereby the authors used between-subjects designs. Studies 1A and 1B, for example, examine the impact of satisfying versus dissatisfying service encounters on platform evaluations, manipulated through scenarios within an on-demand hair salon app context. Study 2 investigates the underlying mechanisms of spillover effects, while Study 3 focuses on the moderating roles of consumers’ risk attitudes and perceived provider-platform independence. Finally, Study 4 replicates the findings of Studies 1A and 1B, albeit in a different context (on-demand laundry platform services).
Through the experimental studies, the authors observe that negative experiences with signaled providers result in significantly lower evaluations of the platform, and demonstrates a greater spillover effect than experiences with nonsignaled providers. However, these differential spillover effects are not observed in cases of positive experiences. In addition, our results reflect that perceived cognitive consistency mediates these effects between the platform’s claims and the third-party provider’s service. Broadly, the findings suggest that these effects are moderated by consumers’ risk aversion and their perception of provider-platform independence.
Future studies could examine spillover effects in multiplatform scenarios, the impact of diverse signaling types (provider credentials, platform guarantees, customer reviews) and the role of information transparency on consumer evaluations. In addition, understanding the long-term impacts of service experiences on platform evaluations could offer insights into whether observed effects are transient or enduring, guiding strategic platform management.
Findings recommend a cautious approach in promoting specific providers to avoid potential negative effects on consumer perceptions after unsatisfactory service experiences. Highlighting the importance of effective service recovery strategies, this research underscores their necessity in addressing negative experiences with highlighted providers. Furthermore, it suggests platforms should work to lessen the perceived overlap between the platform and its providers, improving consumer perceptions through consistent branding and joint initiatives. For new ABS platforms, building a strong overall reputation is emphasized as critical to mitigating the impact of early negative consumer experiences.
This study reveals the asymmetric consequences of a firm’s signaling efforts, and provides crucial insights for firms in their choice of badges as signaling strategies to enhance customer experience and maintain firm reputation.
