Should Firms Use Small Financial Benefits to Express Appreciation to Consumers? Understanding and Avoiding Trivialization Effects

Abstract

Firms commonly add small financial benefits to communications designed to acknowledge consumers' loyalty or support. Yet is it always better to provide some financial benefit as opposed to simply saying “thank you”? Although this question has important implications for customer relationship management, research has not yet provided an answer. This article demonstrates that, indeed, a financial acknowledgment (defined as an acknowledgment with a monetary benefit) can lead to less positive outcomes than offering a verbal acknowledgment (defined as an acknowledgment without a monetary benefit), a phenomenon termed the “trivialization effect.” The results explain this effect in terms of shifting evaluation standards: whereas a verbal acknowledgement is evaluated relative to verbal gratitude expression norms, a financial acknowledgment is evaluated relative to both verbal norms and customers' monetary expectations. The authors also demonstrate two practical, theory-consistent ways firms can structure financial acknowledgments to eliminate the trivialization effect. Thus, this research shows both the peril of small financial benefits as a means of expressing customer appreciation and practical, low-cost ways to salvage their potential.