Center for Services Leadership - The Positivity Effect Applied to Services

The Positivity Effect Applied to Services

If you buy ten cans of soup, and each can turns out to be good, you'll say that it is good soup. If you buy ten cans of soup, and one can turns out to be bad, chances are that you'll say the entire brand of soup is bad. This is an example of negativity bias for products. Research shows that negative information about a product's attributes influences brand perceptions more than positive information. But does the same negativity bias hold true for services? Valerie Folks and Vanessa Patrick from the University of Southern California, Los Angeles recently investigated this phenomena for services, as is described in their latest article, "The Positivity Effect in Perceptions of Services: Seen One, Seen Them All?" in the Journal of Consumer Research (Volume 30, June 2003).

Folks and Patrick conducted four separate studies, varying the amount of information about the service provider, firm and service. What they found just might surprise you: services are subject to positivity, not negativity, effects. The positivity effect suggests that if a customer has good experiences with one of your service providers, he or she is likely to infer that your other service providers behave similarly. It also suggests that if a customer has a negative experience with a service provider, he or she is more likely to attribute that negative experience to the individual provider, not the entire firm. This is good news for services firms, and here's why:

One bad apple doesn't spoil the bunch. Customers are more likely to generalize from good information than from bad information. The study found that when individual service providers are regarded positively, customers' positive perceptions of other service providers in the company are also raised. Customers also view a negatively behaving individual as the "exception to the rule." Bad service from one individual is perceived as a reflection of that individual rather than the whole firm.

External comparisons are not as important. When customers are drawing conclusions about a company, information about an individual service provider is more important than information about other competing service providers. Customers care more about the positive behavior of your individual service provider than positive information about your competitors.

Experience reduces the positivity effect. The more experienced your customer is, the less the effect of the positivity bias becomes. If most service experiences are positive, experienced customers will view subsequent positive experiences as typical of the company. Inexperienced customers are more likely to make inferences about your company based on positive experiences with individual service providers-in essence, inexperienced customers are easier to impress.

What does the positivity effect mean for your company?

Loyalty: If a good service provider leaves your firm, it doesn't necessarily mean your customers will leave with him or her. Rather, this research suggests that when customers have good experiences with one service provider, they will assume that your company is filled with similar service providers, and they may well stay loyal even if the original provider leaves.

Credit: When a service provider does a good job, your customers tend to credit your company overall, not the individual provider. Therefore, when customers are happy with their service, they don't just praise the provider, but the whole firm-an important facet of word-of-mouth advertising.

Second chances: Lastly, the positivity effect shows that bad behavior from one service provider is not a diagnostic of the whole firm-customers will give you a second chance to make things right.