[This blog is based on the Article Snapshot for my article with Michael Giebelhausen, HaeEun Helen Chun, and J. Joseph Cronin Jr. in the Journal of Marketing, July 2016. A six-minute radio dialogue between Michael Giebelhausen and Tomas Hult about the article is on the globalEDGE Business Beat]
Consumers experience a "warm glow" and heightened service satisfaction when they participate in a provider's voluntary green program (and vice versa), an effect that can be dampened or heightened depending on how participation is incentivized.
What motivated this research was our observation that many managers, particularly in the hospitality industry, are reluctant to introduce sustainability initiatives that might negatively impact the guest experience. We wanted to demonstrate that sacrificing for a good cause can actually increase service satisfaction. In addition, little is known about how different types of incentives impact prosocial behavior. Our research is designed to inform this emerging literature, and also provide managers with insights regarding how to best incentivize consumer participation in voluntary green programs.
We used a variety of methods including field studies, analysis of large secondary data sets, and lab studies to test our hypotheses. If compostable and recycling bins suddenly appear at your favorite restaurant, look over at the corner table … we may be watching.?
One interesting finding is that paying people to participate in a voluntary green program increases the satisfaction of those who do not participate (i.e., those who don't get paid). The reason is that the payment offers an opportunity to rationalize their decision to not participate, reducing the associated guilt. Even more interesting, incentivizing participation with a mixed bundle of self-benefiting and other-benefiting incentives maximizes satisfaction for both participants and non-participants. Basically, people selectively interpret the bundle in whatever way best suits their ego.
We can all relate to the experience of feeling good when we do a good deed, so managers should consider incentivizing participation in their sustainability initiatives with a mixed bundle of self-benefiting and other-benefiting incentives. In the hospitality industry, for example, hotels offer loyalty programs that make it easy to reward customer behavior, so such a strategy could be easily implemented.
Michael Giebelhausen, HaeEun Helen Chun, J. Joseph Cronin Jr., and G. Tomas M. Hult (2016), "Adjusting the Warm-Glow Thermostat: How Incentivizing Participation in Voluntary Green Programs Moderates Their Impact on Service Satisfaction." Journal of Marketing, Vol. 80, No. 4, pp. 56-71. doi: http://dx.doi.org/10.1509/jm.14.0497