Poor and rich customers in the service encounter

Purpose: The purpose of this study is to examine categorization leakage from employees in service encounters in terms of indications that the customer has been categorized as either poor or rich. Given that customers perceive themselves as belonging to one of these two categories, leakage can result in perceptions of the categorization as either correct or incorrect, and the specific purpose is to assess the impact of such outcomes on customer satisfaction. Design/methodology/approach: Two between-subjects experiments were used to manipulate service employees’ leakage of categorization clues; the participants were subject to leakage comprising clues that they had been categorized as either poor or rich. The participants’ self-perceived membership in the poor and rich categories was used as a measured factor. Findings: The results indicate that customers are indeed sensitive to how they are categorized in service encounters. More specifically, when categorization in terms of the categories poor and rich was leaked to the customer, being correctly categorized (either as poor or rich) was more satisfying than being incorrectly categorized. In addition, given the valenced charge of these two categories, the results indicate that the category charge per se also influences satisfaction. Originality/value: The present study adds employee categorization leakage to the existing literature dealing with employee-related factors affecting customer satisfaction in service encounters.