The Effects of Quality Uncertainty on the Choice of Timing of Rewards

Abstract: Background- Today online subscription based information products are becoming all the more common. A lot of them are using a immediate reward to compensate the quality uncertainty customer's experience. Even though an immediate reward creates a lot of customer attraction, some services today struggle with customer retention. Purpose- The purpose of this study is to examine how timing of rewards and quality uncertainty affects the choice of products. Method- For this study, four different surveys were conducted all representing one condition each. The survey was distributed to a total of 120 industrial workers from two different companies. A deductive reasoning lay as foundation for the construction of surveys. Result- Our result shows that under specific circumstances an immediate-and-delayed reward is preferable over an immediate reward alone. Also, when it comes to customer retention, a immediate-and-delayed reward is better at retaining customers when quality uncertainty becomes a factor. Conclusion- If customers have a reward upcoming, it is less likely they switch to the uncertain service even if there are an immediate reward present for the competing service. If they are going to switch service and have to give up their upcoming reward, they demand a significantly better quality at the competing service. Delimitations- This study focuses on the effects of timing of reward and quality uncertainty when customers choose or switch to an online subscription based information product. The study isolates timing of reward and quality uncertainty as major drivers for affecting purchase behaviour.