The Hidden Contract in Your Customer’s Mind

Loyalty Science Lab
9 min readOct 5, 2023

How to leverage psychological contract to optimize customer relationship management

Your business works hard to cultivate close relationships with your customers. You may “wine and dine” them, offer special treatments, or use social media to engage them socially and emotionally. But is this always appreciated by your customers?

Dr. Lin Guo, a marketing professor and Loyalty Science Lab researcher at Old Dominion University, says it depends. In a study published in the Journal of the Academy of Marketing Science, Dr. Guo and her coauthors show that companies’ relationship overtures are not always welcome or effective. How consumers react to relationship investments depends on their psychological contract with a business.

Analyzing the responses from 700 consumers across multiple service sectors, the researchers tried to reconcile the paradoxes observed among the consumers. For example,

  • Some consumers happily collect relational rewards from a company’s loyalty program but fail to increase their spending with the company.
  • Some consumers are never satisfied with a company but continue to reward the company with ongoing purchases.
  • Even some of the most frequent travelers surprisingly loathe their most used airlines, stating, “I’m not loyal; I’m…

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Loyalty Science Lab

We are a university research lab devoted to scientific research on brand/customer loyalty. Follow us at https://www.linkedin.com/company/loyalty-science-lab.