Examining customer willingness to pay more for banking services : the role of employee commitment, customer involvement and customer value

Purpose: Although scholars highlighted the need to close the interactive marketing gap and enhanced understanding of willingness to pay more in settings where customer participation in the service delivery process is paramount, research addressing this issue is scare. This study investigates the effect of perceived employee commitment to service delivery and customer involvement on customer value and willingness to pay more. The study also examines the extent to which customer value mediates the effect of employee commitment and customer involvement on willingness to pay more for banking services. Design/methodology/approach: The analysis was based on a sample of 211 Nigerian bank customers procured through a mall-intercept survey technique. The partial least squares structural equation modelling procedure and the Preacher–Hayes Bootstrapping technique aided hypotheses testing. Findings: This study demonstrates that elements of employee commitment to service delivery and customer involvement have significant positive effect on the components of customer value. It also shows that customer value components have significant effect on customers' willingness to pay more. Additionally, the study shows that components of customer value mediate the effect of employee commitment to service delivery and customer involvement on willingness to pay more. Research limitations/implications: The study contributes to closing gaps in interactive marketing literature by uncovering how willingness to pay more for services is influenced by customer perceptions of employee commitment (affective and calculative) service delivery, customer involvement and customer value (hedonic and utilitarian). Practical implications: It is important for managers to put in place measures that will help them know the kind of commitment cues their employees are emitting to customers as well as levels of customer involvement during service encounters. Originality/value: This study breaks new ground in three unique ways. First, the study represents the first attempt to examine the combined effect of employee commitment to service delivery and customer involvement on consumer value perceptions. Second, the study also demonstrates that hedonic value has a more pronounced effect on willingness to pay more for banking services than utilitarian value. Finally, the study shows the extent to which customer value (hedonic vs utilitarian) mediates the effect of employee commitment to service delivery and customer involvement on willingness to pay more.