Decoding the Mind in Service Encounters: A Psychological Insight Approach to Consumer Value and Loyalty

Business School, Lingnan University (Hong Kong), Hong Kong, China

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Abstract

In this study, we focus on consumers’ value perception and loyalty in service settings and decode the mental activities that happen when customers encounter employees. Emotional contagion, empathy, cognitive dissonance and consumers’ perceived psychological safety are integrated into one comprehensive analytical model. The consumers from hospitality and retail industries were investigated and 312 valid questionnaires were collected. The structural equation modeling (SEM) was used for data analysis. The results indicate that emotional contagion and empathy have positive effects on consumers’ perceived value, and cognitive dissonance has negative impacts on consumers’ satisfaction and loyalty. In addition, satisfaction has a partial mediating effect in the relationship between perceived value and loyalty. This research contributes to the understanding of consumer psychology in service settings. Furthermore, several practical implications for business managers are also discussed: by designing services with psychological insights, managers can enhance customers’ emotional connections and gain sustained loyalty.