Segmenting the Customer Base in a CRM Program according to Customer Tolerance to Inferiority: A Moderator of the Service Failure - Customer Dissatisfaction Link

Abstract

Market segmentation has long been a successful marketing strategy. In the recent ten years or so, academics and practitioners in customer relationship management (CRM) have respectively proposed and carried out the further segmentation of the customer base into sub-segments to achieve further customized service and they call it customer segmentation. A review of the customer segmentation literature reveals that the customer tolerance to inferiority, an individual difference, has not been advocated as a base for customer segmentation. This study empirically validates that tolerance to inferiority is a moderator of the effect of service failure on customer dissatisfaction, which suggests its utility as a base for customer segmentation. The practicality and advantage of using such a base is discussed.