Journal of Retailing and Consumer Services 53 (2020) 102009

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Journal of Retailing and Consumer Services

journal homepage: http://www.elsevier.com/locate/jretconser

A Bayesian examination of the relationship of internal and external

touchpoints in the customer experience process across various
service environments
Jose Ribamar Siqueira a, *, Enrique ter Horst b, German Molina c, Mauricio Losada a,
Marelby Amado Mateus d
a
Pontificia Universidad Javeriana, Bogota, Colombia
b
University of the Andes School of Management (Uniandes), Bogota, Colombia
c
Idalion Capital Group, USA
d
Universidad del Rosario, Bogota, Colombia

A R T I C L E I N F O A B S T R A C T

Keywords: Customer experience (CX) is an aggregate of consumer touch points that can be brand-owned (completely
Customer experience controlled by the firm), partner-owned (collectively controlled by the firm and one or more of its partners),
Peer-to-peer interaction customer-owned (where the firm or its partner cannot exert any control or influence) or represented by social/
Retail
external touch points that account for the importance of the roles of others in the customer experience process.
Word-of-mouth
Bayesian methodology
Although the concept of CX is widely used, not much has been examined about how external touch points impact
customer perception of experience. Therefore, the main purpose of this study is to examine the role and impact of
internal and external touchpoints as dimensions of customer experience and how CX can impact consumer word-
of-mouth intention. Service outcome and peace of mind were used to represent internal experience touchpoints
and peer to peer quality (PTP) was used to represent an external experience touchpoint. A total of 293 usable
surveys were used for analysis using a Bayesian model developed for this study instead of the more traditional
SEM approaches. Results showed that an external experience touchpoint has a similar impact to those of internal
experience touchpoints in the experience process. CX was also found to have a strong effect on customer word of
mouth intention. These findings make various contributions to the literature on CX, especially to research
differentiating internal from external experience touchpoints. On the practical side, this study provides recom­
mendations to retailers about how to manage an external touchpoint.

1. Introduction
The importance of customer experience (CX) is grounded in the
belief that the development of solid and positive experiences at multiple
touch points of the customer journey will result in positive customer
outcomes (Homburg et al., 2017a; Klaus, 2014; Klaus and Maklan,
2013). These CX touch points can be classified into four categories:
brand-owned, partner-owned, customer-owned, and social/­
external/independent. Customers might be able to interact with the
touch points that comprise these categories at various stages of their
experiences and the strength and importance of each point can be
moderated by the nature of the product or service being offered, along
with the level of ownership and subsequent control exerted by the
company providing the experience. For this reason, the determination
and understanding of touch point ownership has become important for
experience providers aiming at exerting a stronger influence over be­
haviors which cannot be directly controlled (Lemon and Verhoef, 2016;
Kotler et al., 2016).
The marketing literature on CX has, for the most part, focused on
studying customer satisfaction and service quality (Verhoef et al., 2009).
Certain aspects of customer experience, such as consumption experi­
ences (Babin et al., 1994) and customer reactions in terms of sensing,
feeling, thinking, acting and their relationship with a brand have also
been examined previously (Schmitt, 1999). Moreover, Naylor et al.

* Corresponding author.
E-mail addresses: siqueiraj@javeriana.edu.co (J.R. Siqueira), ea.terhorst@uniandes.edu.co (E. ter Horst), german@germanmolina.com (G. Molina), mauricio.
losada@javeriana.edu.co (M. Losada), marelby.amado@urosario.edu.co (M.A. Mateus).

https://doi.org/10.1016/j.jretconser.2019.102009
Received 21 December 2017; Received in revised form 9 October 2019; Accepted 11 November 2019
Available online 17 November 2019
0969-6989/© 2019 Elsevier Ltd. All rights reserved.
J.R. Siqueira et al.
(2008) argued that most research on retail experience focuses on ele­
ments that fall under the control of the retailer, such as store atmosphere
and its impact on customers’ response. However, certain aspects of a
service experience that cannot be controlled directly by retailers, such as
customers’ the perception of past experiences with other service pro­
viders or advice received from other customers, merit consideration as
well. For example, imagine that you went to a supermarket with a
shopping list at hand and at some point, during your shopping trip you
reach out for a package of the store brand of toilet bowl cleaner tablets.
As you are about to place it in your shopping cart another customer who
was nearby and saw you picking it up approaches you and mentions that
this product has corroded the metal components of the toilet bowls in his
house resulting in a major flooding problem. Interactions such as this
one take place randomly and within minutes and have profound con­
sequences for the experience of the customer planning to buy the
product. Additionally, even though it took place inside the store, it falls
entirely outside the realm of direct control of the retailer (Kotler et al.,
2016). Kranzbühler et al. (2018) later suggested that touchpoints can be
divided into internal and external factors. Little is understood about how
organizations can influence external experience factors that can impact
customer perception of experience. This might occur because organi­
zations focus their attention on factors that fall completely within their
realm of control. Therefore the acknowledgement, comprehension and
internalizations of the impact of external input represent a substantial
area of opportunity for retail firms (Kranzbühler et al., 2018).
In order to be able to properly understand customer experience or­
ganizations need to develop a comprehensive view that integrates the
consumer social realm, defined by the interactions that occur among its
main actors: customer, employees and partners (Bolton et al., 2018).
These interactions result in the development of service systems re­
lationships that occur among customers, suppliers, employees and other
human or non-human actors (Black and Gallan, 2015). Kranzbühler
et al. (2018) argued that research on CX should also include factors that
cannot be directly controlled by the organization (such as other cus­
tomers and the individual) and how they impact customer assessment of
experience. Even though understanding these factors better might not
enable retailers to exert the same degree of control they have over in­
ternal touchpoints, some of these external touch points could be
managed more favorably. Our goal is to propose a model to assess the
impact that an external touch point of the customer journey (repre­
sented by peer-to-peer interaction) has on customer experience and
compare its impact to those of two other internal touchpoints to deter­
mine how they measure up and to determine the subsequent influence of
customer experience on consumer behavior represented by word of
mouth intention. The internal touchpoints are represented by peace of
mind (POM) and service outcome quality (SOQ). Both variables have
been examined in previous CX studies (Klaus and Maklan, 2012; Kim
and Choi, 2013) and represent touchpoints that can be designed and
managed directly by organizations. POM reflects the importance of the
feeling of tranquility a customers feels when dealing with a provider
whereas outcome quality was used to assess a customer’s perception of
what is received during a service encounter.
The proposed theoretical model will provide a significant contribu­
tion to CX theory by acknowledging the importance of multi-point ser­
vice experiences with the examination of a touch point that cannot be
entirely controlled by the retailer, as opposed to the traditional focus on
single-service episodes employed by most retailers (Klaus, 2011).
Our work contributes to marketing research in three main ways.
First, it investigates the relationship between peer-to-peer interaction,
peace-of-mind and service outcome quality within the customer expe­
rience construct and how they compare to each other. Second, it ex­
amines the role that peer-to-peer (PTP) interaction plays as a social/
external/independent touch point in accordance with Lemon and Ver­
hoef (2016), where interpersonal communication among customers
occurs through word-of-mouth (WOM) at the point of sale. Third, the
study introduces the novel approach of applying a Bayesian model to
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Journal of Retailing and Consumer Services 53 (2020) 102009
test the proposed model. Bayesian modeling offers several advantages
over traditional methods in terms of how it approaches sample size
limitations and homogeneity, potential missing data and model
specification.
The next section provides a literature review of the dimensions listed
as dimensions and consequences of CX, along with proposed hypotheses
and a theoretical model. Then, the methodology section will describe the
data collection and analysis procedures used, followed by a discussion of
results and findings. Lastly, the study concludes with a discussion that
outlines the theoretical and managerial implications of the findings,
limitations and potential avenues for further research.
2. Theoretical model and hypotheses development
2.1. The customer experience construct
Gentile et al. (2007, p. 397) argued that, “customer experience
originates from a set of interactions between a customer and a product, a
company, or part of its organization, which stimulate a reaction. This
experience is of a strictly personal nature and implies the customer’s
involvement at different levels (rational, emotional, sensorial, physical,
and spiritual).” Meyer and Schwager (2007, p. 118) defined it as “the
internal and subjective response customers have to any direct or indirect
contact with a company,” where direct contact is usually initiated by the
customer and takes place around the purchase, usage, rendering of
service phases of an acquisition that ultimately fulfill the customer’s
service outcome expectations and reassurance of the purchase decision.
Indirect contact refers to the expected encounters that take place with
representatives of a company’s products, service or brands and even
other customers within the retail setting. It normally occurs in the form
of positive or negative word-of-mouth from sources such as other cus­
tomers, advertising, news reports and social media posts among other
(Payne et al., 2008).” More recently, Klaus et al. (2013, p. 518) defined
CX as “the customers’ dynamic continuous evaluation process of their
perceptions and responses to direct and indirect interactions with pro­
viders and their social environment pre-, during and post-purchase
and/or consumption of the offering at any given point in time.” The
last definition was in line with Verhoef et al. (2009) idea that the
customer experience construct is holistic in nature and is a product of
the customer’s cognitive, affective, emotional, social and physical re­
sponses to elements that fall both within and outside the control of a
service provider. It is an expression of a customer’s combined experience
that encompasses past experiences, the search process, the purchase and
consumption of a product, as well as the post-sale phase where con­
sumers might seek out servicing for a product through multiple channels
(Verhoef et al., 2007).
Marketing research has investigated many of the issues dealing with
experience and posits that the value derived from experience lies mainly
in the outcomes, such as customer satisfaction, loyalty and WOM, it
engenders (Carbone, 2004; Homburg et al., 2017a; Meyer and
Schwager, 2007). The pursuit of these outcomes through the imple­
mentation of CX can be a very challenging task because of its broad
definition, which encompasses time, multiple touch-points, emotions
and senses, among other dimensions (Baxendale et al., 2015). Addi­
tionally, the notion of time is crucial to the concept of the customer
journey because customer evaluation can take place before and after the
service encounter (Payne et al., 2008). The implied concept of pre- and
post-service encounter experiences introduces variables with emotional
and functional characteristics, such as the customer’s social context or
the assessment of value-in-use and is formed across various channels and
subject to various contexts (Lemke et al., 2011). Furthermore, the
measurement of the customer perception of CX quality and its effects on
business performance is difficult to estimate (O’Neill et al., 2002). Some
researchers have hypothesized that CX can impact profitability (Sri­
vastava and Kaul, 2016; Verhoef et al., 2009), business performance
(Prahalad and Ramaswamy, 2004) and marketing outcomes, such as
J.R. Siqueira et al.
customer satisfaction, loyalty, WOM and purchase/repurchase intent
(Camarero, 2007; Fernandes and Cruz, 2016; Verhoef et al., 2016).
Other researchers add that customer satisfaction, loyalty, WOM and
purchase/repurchase intent are among the most important conse­
quences of CX that can influence purchasing behavior (Mascarenhas
et al., 2006; Pine and Gilmore, 1998). This point was further reinforced
by Klaus et al. (2012), who argued that most of the customer value
produced by CX lies in customer satisfaction, loyalty and WOM.
Experiences are lived by customers as personal events and the degree
of co-creation that occurs in this process is directly related to their level
of interest and participation (Pencarelli and Forlani, 2018). As the
importance of CX grew, many authors started to propose different
models to measure it. Some of these models did not necessarily measure
CX in its proposed holistic sense (Verhoef et al., 2009), as is the case with
net promoter score (NPS), which is still mistakenly treated as a CX in­
strument by service providers (Klaus and Maklan, 2012). Another model
developed by Brakus et al. (2009) focuses on the specific impact of a
single dimension of CX, such as brand experience and brand personality,
on satisfaction and loyalty. Other authors, such as Verhoef et al. (2009)
and Palmer (2010), introduced conceptual models of customer experi­
ence creation without a clear instrument or method to corroborate it
empirically. It was not until the development of the experience quality
scale (EXQ) by Klaus and Maklan (2012) that CX could truly be
measured and analyzed in more detail. The EXQ scale defined CX as “the
customer’s cognitive and affective assessment of all direct and indirect
encounters with a firm, in a purchasing context” (Klaus and Maklan,
2012, p. 509). As groundbreaking as it is, the EXQ scale was originally
developed to measure CX within a particular service setting. The scale
was developed to assess CX in a financial institution, using a sample of
repeat customers. While it might be reasonable to assume that it would
work in certain settings, it might not accurately capture customer
experience in other industries or channels (Lemon and Verhoef, 2016)
without some modifications of its items (Imhof and Klaus, 2019). Kim
and Choi (2013) later proposed a model that addressed part of this issue
by allowing for a wider range of applications. Their model examines the
impact of service outcome quality, interaction quality and peer-to-peer
quality on customer experience quality, and the impact of CX on
customer loyalty.
3. Antecedents and outcomes of customer experience
3.1. Peer-to-peer interaction
Eiglier and Langeard (1977) were among the first to explore
peer-to-peer interaction by introducing a model that divided the service
organization into parts classified as visible or invisible to customers,
where visible parts are represented by inanimate surroundings and
contact personnel, while invisible parts represent the role other cus­
tomers play and how they can influence customer perception of service
experience. Peer-to-peer interaction within a service context can take
place either on site or off-site (Harris et al., 2000) and can be expressed
through customer WOM behavior.
The theoretical foundation of peer-to-peer research was significantly
influenced by the service-dominant logic perspective of Vargo and Lusch
(2004), and consequently, the awareness of the role customers play in
service rendering started to be discussed as a form of customer
co-creation (Nicholls, 2010). Customer-to-customer interactions are
important because of their uncontrollable nature that can produce un­
desirable outcomes when left unattended (Harris and Reynolds, 2003)
and, consequentially, lead to a poor customer experience. As a result of
management’s focus on controllable elements, the retail experience
literature has focused mostly on the elements that can be controlled by
the retailer, such as the responses of consumers to scents, music, tactile
input and color (Naylor et al., 2008). Yet, interactions among customers
can also have a significant impact on the customer experience (Baron
et al., 1996; Verhoef et al., 2009). The consumers’ perception of their
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Journal of Retailing and Consumer Services 53 (2020) 102009
total experience may include touch points that cannot be controlled by
the service provider, such as interactions with other consumers inside
the store (Palmer, 2010). Verhoef et al. (2016) defines this particular
group of touch points as social/external/independent.
Conceptually, peer-to-peer interaction is considered a means for
customers to express their perception of the superiority of a product or
service by interacting with another customer (Lemke et al., 2011). This
interaction can occur through helping behavior, knowledge sharing
(McGrath and Otnes, 1995) or the disruptive behavior of another
customer during an event (Verhoef et al., 2009). The importance of
interpersonal communication and influence is not new to social psy­
chology literature (Katz and Lazarsfeld, 1955) and was also investigated
by consumer behavior scientists examining scenarios where information
was sought, as well as provided (Engel et al., 1995). Results found in the
literature show that customers develop a higher likelihood of relying on
interpersonal communications in environments with higher intangible
characteristics (Murray, 1991; Zeithaml et al., 1993).
Regardless of the importance PTP has in service experience, the
literature still pays little attention to the interactions among customers
that can occur inside the retail environment and affect customer expe­
rience (Baron et al., 1996; Martin, 1996). Even though peer-to-peer
interaction is an important component of the customer experience
process, it does not occur in all service environments. Evidence pre­
sented by Harris et al. (1995) and McGrath and Otnes (1995) suggested
that the probability of verbal interaction taking place between cus­
tomers within a retail environment can also be moderated by factors
such as demographic groups. They also showed that unacquainted
shoppers can positively or negatively affect the shopping experience of
other customers. The interactions that take place within the retail
context can result in both empathy and enmity, depending on what
drove them. People can be prompted to interact with others when
confronted with adversity and this interaction can take the form of
help-seekers, proactive helpers, followers or observers within the retail
context. As McGrath and Otnes (1995, p. 271) pointed out: “the
marketplace context both creates and assumes a decision situation on
the part of participants. People respond to others when they face an
unsolved problem (help-seeker, proactive helper, follower, observer),
they presume to have a value or experience to contribute to another
(reactive helper, judge, accused, spoiler), there is sensory stimulation
that catches their attention (admirer, complainer), or there is a
perceived shortage (competitor).” Given the role PTP plays as an un­
controlled touch point of indirect customer interaction with providers,
we propose that:
H1. Peer-to-peer interaction positively affects customer experience
3.2. Service outcome quality
Consumer experiences can be extremely positive or negative in na­
ture, causing expectations to either be greatly exceeded or greatly un­
fulfilled, which results, respectively, in strong feelings of satisfaction or
dissatisfaction with the service received (Lundstrom, 1978; Oliver,
1981). Conversely, during non-extreme service situations, customers’
service evaluations tend to become more rational and cognitive. Their
affective evaluation will take place at a later time and will be based on
these cognitions. This can result in cognitive service quality evaluations
that influence customer satisfaction (Dabbolkar, 1995). Hence, service
outcome, as proposed in our model, deals with the end result of the
experience process from the perspective of the customer. It represents a
benefit received by customers during the exchange with a retailer (Mohr
and Bitner, 1995) that can influence their subsequent behavior because
of its inherent emotional component (Dabholkar and Walls, 1999).
In this study, the outcome focus dimension relates to the reduction of
a customer’s transaction cost, such as the financial or time costs asso­
ciated with an acquisition, as proposed by Klaus and Maklan (2012).
According to the authors, this dimension deals with the importance of
J.R. Siqueira et al. Journal of Retailing and Consumer Services 53 (2020) 102009

goal-oriented experiences in consumer behavior that can help form a of experience by customers, we posit that:
habit. Outcome quality was also present in the Kim and Choi (2013) CX
H3. Peace-of-mind has a positive effect on customer experience
model, due to its importance in accessing a customer’s perception of
what is received during a service encounter. Outcome quality was also
3.4. Word of mouth
previously discussed by Solomon et al. (1985) who argued that the
service outcome in the customer process of quality assessment of a
Word-of-mouth (WOM) behavior in a service context has not
service encounter is important. Given the role outcome plays in the
received much attention from researchers (Anderson, 1998). The liter­
continuous customer evaluation process of perceptions and responses
ature has focused more on product-related word-of mouth behavior,
related to experience, we posit that:
which tends to report behavior related more to consumption experience
H2. Service outcome quality has a positive effect on customer as a key determinant of the nature of the communication that takes place
experience (Bitner, 1992). Meyer and Schwager (2007, p. 118) argued that WOM
was the result of “the internal and subjective response customers have to
any direct or indirect contact with a company. Direct contact generally
3.3. Peace-of-mind
occurs in the course of purchase, use, and service and is usually initiated
by the customer. Indirect contact most often involves unplanned en­
Research on peace of mind has been scarce and can mostly be found
counters with representatives of a company’s products, service or brands
in the medical field (Mack et al., 2009; Nystro €m and
and takes the form of word-of-mouth recommendations or criticisms,
Andersson-Segesten, 1990; Parrish and Quinn, 1999). It was not until
advertising, news reports, reviews and so forth.” Customers not only pay
Lee et al. (2013) set out to research it that a better scientific represen­
attention to the cognitive insights and consumption patterns of other
tation of the construct was developed. Lee et al. (2013, p. 5) defined
customers (Hinz et al., 2011), but their decisions are increasingly being
peace of mind as “the extent to which one experiences inner peace and
influenced by interactions with other product or service users (Cialdini,
harmony”. Internal peace within this context refers to the concept of
1993). These interactions can be positive (when customers express their
ideal affect (how people want to feel) and its experience captures the
satisfaction with a provider), negative (mostly generating customer
states of mind such as peacefulness, calmness and serenity (Tsai et al.,
dissatisfaction and desire to reciprocate for the bad experience) or of an
2006), whereas internal harmony focuses on states of mind that include
extreme positive nature that prompts satisfied customers to talk about
balance and harmony (Lee et al., 2013). POM was also argued to be
their positive experiences with a product or service (Angelis et al.,
reciprocally related allowing people to be capable of achieving internal
2012).
peace through the process of harmony or vice-versa, suggesting that
The role of WOM in the process of consumer decision-making has
individuals with peace-of-mind can experience both internal peace and
been well examined. Hartline and Jones (1996) presented WOM as a
harmony as one coherent state (Lee et al., 2013).
consequence of service quality and perceived value, and Maxham and
For the purposes of this research project we will adopt Klaus and
Netemeyer (2002) found it was an outcome of service recovery attempts.
Maklan (2012) operationalization of the POM construct where it was
WOM was also examined as an outcome of satisfaction and affective
associated with the manner in which customers assess the interaction
responses to assess post-purchase behavior (Swan and Oliver, 1989). It
they have with a provider before, during and after a transaction takes
was also found to influence service quality perceptions when consumers
place. The focus shall remain on how peace-of-mind affects a customer’s
had doubts regarding products or services they were considering, either
evaluation of the relationship with a provider as a whole, instead of
prompting them to stay with their current providers or to completely
merely viewing it as a transaction (Geyskens et al., 1996). This dimen­
give up the purchase of a new product (Brown et al., 2005). Wang (2011)
sion reflects the emotional benefits, namely the feeling of internal peace
showed that WOM can even lead to favorable service quality perceptions
and harmony, that customers experience based on their perception of
and high purchase intent and that more positive WOM events during the
the service provider (Bendapudi and Berry, 1997) and how the provider
service encounter can lead to favorable service quality perception and
guides them throughout the decision-making process during product or
stronger purchase intention. In fact, the tendency to purchase a service
service acquisition.
increases the more a consumer receives consistent positive WOM during
Because product or service acquisition can be a very emotional
a service encounter (Mazzarol et al., 2007). WOM is particularly
process, the emotions experienced at the time of decision-making can
important in a service environment because of how its intangible nature
alter perception and indirectly influence decisions. Immediate emotions
can prevent consumers from trying anything before purchasing it (Zei­
can result in faulty decisions that can distort decision makers’ judgment
thaml et al., 1985). The majority of consumers engage in word-of-mouth
of self-interest (Loewenstein and Lerner, 2003). Additionally, the level
activities related to their consumptive activities (Singh, 1988), sup­
of importance attributed to some decisions can affect a consumer’s
porting the relationship between service quality perceptions and
loss-aversion sentiment. Even though the original studies of loss aver­
favorable word-of-mouth (Parasuraman et al., 1988). Hence, we posit
sion were based on two-outcome monetary gambles, researchers also
that:
identified different contexts where loss-aversion sentiment was present.
Among these were areas relevant to consumers and marketing managers H4. Customer experience has a positive effect on word-of-mouth
(Novemsky and Kahneman, 2005a). Rabin (2000) argued that loss behavior
aversion within some of these contexts can cause consumers to become
more cautious and take fewer risks. Nevertheless, loss aversion can be 4. CX model
decreased through an increase in peace-of-mind (Novemsky and Kah­
neman, 2005b), highlighting its importance in the CX process. 4.1. The conceptual framework
Consumer expectation is that the process of dealing with a provider
will be both easy and reassuring in order to reinforce their peace-of- The model adopted for this study does not treat CX as a continuum,
mind (POM) sentiment (Dabholkar et al., 1996), which, as a conse­ where the experience of a customer is both perceived and assessed ac­
quence, will increase confidence in the provider (Bendapudi and Berry, cording to the various ongoing interactions that occur with a service
1997). The ability to positively address a customer’s peace-of-mind is provider. These interactions can include information collection, offer­
particularly challenging in a service-intensive environment, as it is in the ings evaluation, physical interactions, consumptions of services and
service context. This is attributed to the intangible nature of the service post-consumption evaluation (Klaus and Maklan, 2013). The concept of
component that tends to increase consumers’ perception of increased CX as a continuum also implies a temporal assessment of the customer’s
risk (Levitt, 1981). Given the role POM plays in the cognitive assessment experience, comprising of pre-, during- and post-consumption of the

4
J.R. Siqueira et al.
service. Instead, we focus on a single moment when a service was
rendered and how it was recalled by participants based on certain di­
mensions (namely peer-to-peer interaction, service outcome quality and
peace of mind) that might have impacted the CX process and served as a
catalyst of WOM behavior. Holbrook and Hirschman, 1982postulated
that an experience is not simply a cognitive process but a process also
subjected to hedonic, symbolic and aesthetic elements. This character­
izes CX as a subjective phenomenon that cannot be fully controlled by
the firm (Verhoef et al., 2009). As a consequence, CX research has
traditionally focused on two different angles: organizational and con­
sumer perspectives. The organizational perspective focuses on the cre­
ation of CX through static factors such as physical environment of a store
and how the interaction between employees and customers affects
perceptions of experiences (e.g. Bitner, 1990). Conversely, the customer
perspective focuses on their perceptions of those experiences examining
the impact of both factors that fall within and beyond a firm’s control.
Because of CX’s holistic nature (Verhoef et al., 2009) and the fact that is
can also be characterized as an umbrella construct, defined as a ‘broad
concept used to encompass and account for a diverse set of phenomena’
Hirsch and Levin, 1999(p. 199), a model capturing all variables that are
relevant to the CX is still not feasible. At the same time the nature and
the impact of variables changes based on the context where CX is being
assessed. For example, the model proposed by Klaus and Maklan (2012)
was developed with the financial segment in mind where the model
suggested by Kim and Choi (2013) was used for more general experi­
ences. Verhoef et al. (2009) recommended that researchers should
examine factors that can impact the customer’s experience’ that are both
within and outside retailers’ control. Based on this recommendation we
propose a model that captures an uncontrollable factor (represented by
PTP interaction) and controllable factors (represented by outcome focus
and peace-of-mind). The evaluation of the role of other customers and
their impact in the different phases of the customer journey is a key
component of the overall customer experience (Kranzbühler et al.,
2018) while outcome focus is considered to be one of the most important
factors for consumers making cognitive evaluations the major driver
behind CX perceptions Nguyen et al., 2012. The need for reassurance in
dealing with the retailer on the part of the customer was also deemed
important for the experience process as well as the role of CX as an
antecedent of WOM (Klaus and Maklan, 2012; Klaus, 2014) and WOM’s
importance as a positive customer outcome (Homburg et al., 2017a).
The proposed theoretical model was based on Verhoef et al. (2009)
suggestion that the holistic perception of customer experience is influ­
enced by four major antecedents: social environment, service interface,
retail store atmosphere, and past customer experience. Therefore, based
on previous research on CX by Gentile et al. (2007) and Verhoef et al.
(2009), we argue that because of the holistic nature of the CX construct,
PTP, SOQ and POM are important factors that affect customer percep­
tion of CX in a retail setting resulting in positive WOM. Fig. 1 illustrates
the proposed research model for this study:
Fig. 1. Research model.
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Journal of Retailing and Consumer Services 53 (2020) 102009
5. Methodology
5.1. Sample
To test the proposed hypotheses, data were collected at universities
in Bogota, Colombia, the largest metropolitan city in the country where
there is also an intense competitive retail environment with savvy and
educated consumers. Colombia is an emerging market in Latin America
that has attracted the attention of many different multinational com­
panies. It is very similar to other Latin American emerging markets in
terms of its retail structure and consumer behavior. In the 1990s, the
retail environment in Colombia saw many changes due to the market
opening process, which allowed Colombian consumers to enjoy the
benefits introduced by market competition. As a consequence, local
companies had to withstand and learn to deal with foreign competitors
attempting to establish their foothold in the market. As a result, the
Colombian retail sector modernized and became more competitive
(Molina London ~ o, 2010), which resulted in a new empowered Colombia
consumer who demanded a more personalized shopping experience and,
most importantly, despite remaining very price conscious, the ability to
make purchase decisions based on criteria that were not considered
before (Dinero, 2009).
A total of 335 university students participated in this survey. Of
these, 42 surveys were removed due to the lack of engagement of par­
ticipants, which resulted in a final sample of 293 usable questionnaires.
Students were invited to participate in the survey by professors of
various courses in their universities. Participation was completely
voluntary and students could quit the survey at any moment. Never­
theless, a point must be raised to discuss the appropriateness of college
students as suitable surrogates for other individuals in the population
(Peterson, 2001). While students might not flawlessly represent the
broad population, they are perfectly capable of making decisions and
moral judgments under various scenarios (Porcano, 1984) and clearly
display the cognitive processes of “real” people (Alm & McKee, 1998),
which qualifies them to represent a certain type of individual. In the
particular case of this study, that individual is the retail consumer.
Additionally, Calder, Phillips, and Tybout (1981) argued for the use of
college students as subjects in consumer research when the research was
theoretical in nature, which fits the theory generalization scope of this
study.
The participants were 52% male and 48% female and the survey was
conducted in a self-completed questionnaire format with subjects being
first asked to recall their most recent purchase experience with some
form of service involved in the process (interaction with a salesperson,
delivery, etc.). In addition, they were asked to write down the name of
the store to improve recall accuracy. The reported service formats
included movie theaters, clothing retailers, department stores, airlines,
gyms, supermarkets, restaurants and telecommunications companies.
The variety of service formats fell within the expected range and were
aligned with the respondents’ anticipated lifestyles.
5.2. Latent variables
5.3. Measures
The survey instrument employed was based on the instruments used
by Klaus and Maklan (2012) and Kim and Choi (2013) who in turn
referred to existing scales found in previous research on service mar­
keting that demonstrated reliability and validity and reflected common
factors. The term XYZ used in the original instrument for some of the
questions was replaced with “the recalled store” in order to fit with the
subject’s recollection of their most recent purchase experience. The in­
strument was double back translated by native speakers within the
framework of collaborative and iterative translation, as proposed by
J.R. Siqueira et al. Journal of Retailing and Consumer Services 53 (2020) 102009

Table 1 Douglas and Craig (2007). The resulting instrument reflects a compre­
Measurement items. hensive literature review and its items were additionally assessed by a
Latent Measurement items Item References panel of academic colleagues for content and face validity. The selected
variables measurement items were deemed appropriate to the context of the study
Service I feel good about what the recalled SOQ1 Brady and and provided the basis for the specification of each of the researched
outcome store provides to its customers. SOQ2 Cronin (2001) constructs. The measurement items were used as originally designed
quality I believe that the recalled store SOQ3 Mohr and Bitner when possible, or modified when necessary, to better suit the nature of
provides superior outcome to its SOQ4 (1995) this study. The final survey instrument accounted for particularities of
customers. Mohr and Bitner
I would say that the recalled store (1995)
the country where the study took place and was tested with a sample of
provides requested outcomes to Brady and 20 respondents to assess the response format, as well as the clarity of the
its customers. Cronin (2001) instructions. All measures used for the current study are shown in
I always have an excellent Table 1. The subjects were asked to select responses based on five-point
experience when I visit the
Likert scales for agreement, likelihood and frequency.
recalled store.
Peer-to-peer I would say that the quality of my PTPQ1 Brady and
quality interaction with other customers PTPQ2 Cronin (2001) 6. Analysis and results
at the recalled store is excellent. PTPQ3 Lemke, Clark
I believe that we get superior PTPQ4 and Wilson
6.1. Measurement model
interactions with other customers PTPQ5 (2011)
at the recalled store. Lemke, Clark
I think that total contact with and Wilson The possible impact of common method variance in this study was
other customers at the recalled (2011) assessed by loading all the items from the study’s model into one factor.
store is excellent. Lemke, Clark The result accounted was well below the 50 percent threshold required
I find that the recalled store’s and Wilson
for it to be considered a separate construct. This suggests that common
other customers consistently leave (2011)
me with a good impression of its Lemke, Clark method variance did not interfere with our ability to test the proposed
service. and Wilson hypotheses. As an initial step in the model estimation process, we con­
The recalled store’s other (2011) ducted an exploratory analysis using SPSS 24 in order to assess the
customers do not affect its ability
proposed model and check for any factor cross-loadings. It is important
to provide me with good service
Peace of mind I am confident in the recalled POM1 Klaus and
to note that although the reflective approach to latent variables is very
store’s expertise. POM2 Maklan (2013) common in the extant literature, the correct application of these scales
The whole process with the POM3 Klaus and requires attention to certain aspects (Ellwart and Konradt, 2011). First,
recalled store was easy. POM4 Maklan (2013) researchers must take into consideration that reflective scales require a
The recalled store will look after POM5 Klaus and
correct specification of the measurement model for achieving high in­
me for a long time. POM6 Maklan (2013)
I stay with the recalled store Klaus and ternal consistencies and for reducing the bias of the estimations of the
because of my past dealings with Maklan (2013) structural relations between constructs (MacKenzie et al., 2005). Sec­
the recalled store. Klaus and ond, when researchers need to measure multidimensional constructs (e.
I have dealt with the recalled store Maklan (2013) g., second-order constructs), researchers need to consider that the latent
before so getting what I needed Klaus and
was really easy. Maklan (2013)
reflective scales require many items for capturing the different di­
The recalled store give(s) mensions of second-order constructs (Ellwart and Konradt, 2011). As it
independent advice. is probable that for achieving high internal consistency researchers need
Customer I would say that the experience CX1 Brady and to drop items that have a low correlation with other items of the same
experience at/with the recalled store is CX2 Cronin (2001)
construct, there is a risk that reflective scales only partially capture the
quality excellent. CX3 Lemke, Clark
I believe that we get superior CX4 and Wilson multiple dimensions of second-order constructs. This last issue may
experience at the recalled store. CX5 (2011) occur because second-order constructs may have distinct conceptual
I think that total experience Lemke, Clark content, and so are non-redundant, and cannot be interchanged (Lee and
procedure at the recalled store is and Wilson Cadogan, 2013). As a result, the following items were eliminated:
excellent. (2011)
When I leave the recalled store, I Brady and
PTPQ5, POM6, CXQ1 and 4 and WOM1. The resulting model produced a
usually feel that I had a good Cronin (2001) KMO of 0.939 with a total variance explained of 72.9. Psychometric
experience Brady and properties of the scales were tested using Cronbach’s Alpha, generating
I believe the recalled store knows Cronin (2001) the following results: PTPQ ¼ 0.848, SOQ ¼ 0.898, POM ¼ 0.879,
the type of experience its
CXQ ¼ 0.859 and WOM ¼ 0.914.
customers want
WOM behavior Mentioned to others that you do WOM1 Brown et al. Subsequently, we opted for a Bayesian hierarchical model approach
business with the recalled store. WOM2 (2005) to test our proposed model. We obtained noisy observations of the un­
Made sure that others know that WOM3 Brown et al. known latent constructs that follow the proposed relationships in Fig. 1.
you do business with the recalled WOM4 (2005) This approach has multiple advantages over traditional covariance-
store. WOM5 Brown et al.
Spoke positively about the WOM6 (2005)
based structural equation modeling, such as: (1) it does not rely on
recalled store employee(s) to WOM7 Brown et al. large-dimensional datasets to achieve sufficient statistical validity of the
others. (2005) results (we model the relationships as unknown parameters, rather than
Recommended the recalled store Brown et al. estimates of an unobserved “true” value); (2) the two-hierarchy
to family members. (2005)
approach, where the unobserved follow the hypothesized relation­
Spoke positively of the recalled Brown et al.
store to others. (2005) ships, is more aligned with reality, where declared perceptions are
Recommended the recalled store Brown et al. naturally noisy and non-homogeneous between participants; and (3) it
to acquaintances. (2005) provides a natural framework for incorporating prior information
Recommended the recalled store (including prior beliefs or biases and using imperfect information),
to close personal friends.
which offers a more flexible approach to human psyche, learning and
neural processing of information (Ko €rding et al., 2004; Kording and
Wolpert, 2004). Modeling through Bayesian estimation can provide a
degree of flexibility where a traditional frequentist approach is not

6
J.R. Siqueira et al.
feasible (Efron, 2012). Bayesian methods are becoming gradually more
critical for modeling the different types of data that are increasingly
available to organization researchers (Zyphur and Oswald, 2013).
Additionally, because existing data and probabilities are incorporated
into Bayesian estimation incorporates existing data and prior informa­
tion (probabilities) it is not possible to conduct parameter estimations
that would be impossible with ML methods (Garrett and Zeger, 2000).
Bayesian methods are also helpful when dealing with information pro­
vided by small samples where supporting frequentist hypotheses with p
values are nearly impossible to support (Howson and Urbach, 2006). For
example, Donthu (1991) used a Bayesian Cross Validation Likelihood
approach to model comparisons of market area densities estimated using
kernel density estimation. Jenet al. (2003) applied Bayesian methodol­
ogy to model the frequency in which customers interact with a firm and
their purchase frequency. This was done through a hierarchical Bayes
model of purchase frequency with observed and unobserved compo­
nents of heterogeneity. The authors managed to demonstrate the
advantage of using a hierarchical Bayes approach relative to the other
approaches by showing how much more reliable it is than simple esti­
mates without placing undue restrictions on their variability. Rossi and
Allenby (2003) proposed a Bayesian hierarchical model with two core
components to investigate the effects of brand extension and the core
attributes of experience product franchises. Chintagunta and Lee (2012)
utilized a two-part model where the first part is based on a hierarchical
growth model where growth factors reflect the role of the various
covariates and the second part is simultaneously estimated within a
Bayesian framework. A similar approach, though with a different like­
lihood function approach to the observations, was successfully utilized
in Dakduk et al. (2017).
The two hierarchies in the model are (A) the observation equation,
which provides us with information about each of the constructs with
individual-specific, construct-specific and measurement item-specific
sources of noise; and (B) the latent trait equation, which relates the
variables according to Fig. 1, while still allowing for individual-specific
divergence from the theoretical model. The goal is to extract all the
sources of noise and estimate the key parameters of the model, namely
the relationships between the latent constructs (beta parameters) within
the measurement model.
Bayesian analysis allows for estimation of models without having
over-reliance on large samples. In the particular example within this
manuscript, a sample size of N ¼ 293 is used to extract the latent re­
lationships from multiple Likert constructs. Since each K-category Likert
construct involves the estimation of K-1 underlying thresholds (plus
additional hierarchical regression parameters), the parametric
complexity of these types of models can increase quickly with model
complexity. Bayesian approaches allow for modelling without con­
straints of sample sizes, as the outcomes of the analysis are a direct
representation of the uncertainty about the parameters, rather than
values of estimators which rely on Central Limit Theorem assumptions
for their validity. Another advantage of the Bayesian approach is the
potential incorporation of prior information about relationships. Prior
studies may provide a basis from which to draw prior information that,
when combined with the observed data, can provide an ‘updated’ dis­
tribution (posterior distribution) of the parameters accounting both for
prior and current information in a seamless fashion. While this study
does not utilize prior information (flat priors were used to reflect ‘no
prior information’), the Bayesian approach allows for the flexibility to
incorporate information should it exist prior to the study. Subjective
prior distributions are oftentimes drawn from expert knowledge or prior
studies and mapped to probability densities that reflect the amount of
knowledge about the parameter prior to the study. This can take the
form of expected values, uncertainty, or simply potential ranges (bounds
of the relationships). The alternative to subjective prior elicitation is to
provide no information through the prior (for more information, we
refer the reader to the Objective Bayes literature), so that, in the limiting
case (as the sample size goes to infinity), the Bayesian solution is
7
Journal of Retailing and Consumer Services 53 (2020) 102009
equivalent to the Frequentist solution. This is the approach within this
paper.
The Bayesian estimation approach for this problem encompasses the
following elements:
6.1.1. General model
Yi;j;kðjÞ � MNðYi;j;kðjÞ jT; C; Pi;j Þ
Pi;j ¼ Φðζj μi;j Þ
j
X
ζj ¼
pffiffiffiffi pffiffiffiffi
ξj with​ standard​ hyperpriorsξ1 �Nðξ1 j0; τξ Þandξj6¼1 �Gaðξj6¼1 j τξ ; τξ Þ
s¼1
6.1.2. CX model-specific priors
μi;5 � N1 ðμi;5 jβ4 μi;4 ; τμ Þ
μi;4 � N1 ðμi;4 jβ1 μ1 þ β2 μ2 þ β13 μ3 ; τμ Þ
μi;1 ; μi;2 ; μi;3 � N3 ðμi;1 ; μi;2 ; μi;3 j0; τμ IÞ
βj � N1 ðβj j0; τβ Þ
6.1.3. Description of each variable, distribution and subindex
MN(X|a,b,c) ¼ Multinomial density with a observations of b cate­
gories occurring with probability vector c.
Φ ¼ (C-1)-dimensional gaussian cumulative density vector function
(Φ : RC 1 →½0; 1�C 1 )
Nd (X|a,b) ¼ d-dimensional gaussian density with mean a and pre­
cision parameter b.
Ga(X|a,b) ¼ Gamma distribution with parameters a and b.
i ¼ index for the individuals in the sample.
j ¼ construct of interest (PTP, SOQ, POM, CX and WOM respectively
in our model)
k(j) ¼ 1, …,K(j) measurement items about construct j.
Yi;j;kðjÞ ¼ likert-based observation of individual i, for the k-th mea­
surement item about construct j.
T ¼ Number of questionnaires per individual (T ¼ 1)
C ¼ Number of likert categories per construct (C ¼ 5, although the
assumption of equal number of likert scales can be easily relaxed)
Pi;j ¼ (C-1)-dimensional latent probability vector for each likert scale
CP1
for individual i and construct j, with. Pi;C ¼ 1 Pi;j ζj ¼ (C-1)-
j¼1
dimensional vector of latent thresholds for construct j, mapping the
space of a latent mean into probability areas.
μi;j ¼ Latent mean perception of individual i about construct j (μi is
the vectorized form)
I ¼ Identity matrix.
τμ ; τβ ; τξ ¼ Precision factors (fixed vague hyperparameters, although
informative options are possible)
ξj ¼ Hyperpriors for the distances between latent thresholds.
6.2. Description of the model
We allow each of the observed measurement items to follow a
multinomial ordered probit structure, with underlying latent probability
vectors that are construct- and individual-dependent, and those will be
linked with a latent individual-dependent mean, representing the
standings of each individual about each construct. The Bayesian
formulation is completed with hyperpriors for each of the parameters,
and the model is estimated using a standard combination of Gibbs
sampling and Metropolis-Hastings algorithms, taking advantage of the
conjugacy of the core construct. We allow for a 1000 iteration burn-in
and run the model for another 39,000 iterations, with no thinning
J.R. Siqueira et al. Journal of Retailing and Consumer Services 53 (2020) 102009

necessary for this chain, since the mixing of the chain is healthy, as seen
in Figs. 3 and 4.

6.2.1. Interpretation of numerical results

6.2.1.1. Evidence of good mixing of the Markov chain. We ran the model
with a 1000-run burn-in and gathered the following 39,000 MCMC it­
erations. All the posterior densities for the β parameters have negligible
mass below zero, indicating that there is strong evidence of significance Fig. 3. Traceplot of the MCMC algorithm for parameter linking PTP to CX
of the relationships between the constructs, as seen in Figs. 5–8. Each of (beta 1)”.
those represents each of our stated hypothesis.
PTP, SOQ and POM show each very strong (and strikingly similar)
relationship with CX. Each component contains an almost equivalent
amount of information which helps define the CX value of the individ­
ual. Similarly, CX contains a large amount of information used to define
the WOM value of the individual.

6.2.2. Posterior density plots of the quantities of interest

The interpretation of posterior densities is simple. They reflect the
amount of knowledge about the parameter given the data. In contrast Fig. 4. Traceplot of the MCMC algorithm average CX level for individual 1000 .
with frequentist outcomes, which reflect an estimator of the parameter,
the Bayesian approach reports the posterior distribution (after ac­
counting for data and any prior information provided) for the parame­
ters. This allows for direct interpretations. For example, in the case of
Fig. 8, the interpretation is that the ‘beta’ relating CX and WOM is almost
certain to be positive, and has a 95% probability of lying between
0.4952 and 0.6979, as reflected in Table 2 and Fig. 2. Note that this
represents the knowledge about the parameter itself (considered a
random variable) given the data (and a non-informative prior), rather
than a frequentist, more binary interpretation of an estimator of the
parameter (about a fixed and unknown parameter value) and its confi­
dence intervals.
Fig. 5. Posterior density for the linear parameter relating PTP and CX.
7. Discussion

7.1. Theoretical contributions

Customer experience is a relatively new construct that still attracts

less attention than older and more established constructs, such as service
quality. From an academic standpoint, this study presents empirical
support for relationships that had been previously outlined in the CX
literature but not tested in a model such as the one we proposed.
Additionally, the proposed dimensions that affect CX discussed in this
analysis have a broader categorical application, supporting the research
of CX within multiple service formats and addressing the call from Fig. 6. Posterior density for the linear parameter relating SOQ and CX.
Lemon and Verhoef (2016) for new CX models because most of the
currently available models focus on a single industry such as banking or
financial services (Klaus et al. 2012, 2013).
All proposed hypotheses were supported, indicating that customer
perception of peer-to-peer interaction, service outcome quality and
peace of mind have a positive influence on CX within the service context.
It is important to note that the relationships between the three proposed

Fig. 7. Posterior density for the linear parameter relating POM and CX.

dimensions and the CX construct varied very little in strength when

Fig. 2. Research model results.
compared to one another: PTP (0.326), SOQ (0.332) and POM (0.307),
which suggests that not only are these dimensions important to cus­
tomers, but that they might be valued similarly. What this suggests is
that in spite of the fact that most of the literature on CX focuses on more
functional, measurable and manageable dimensions such as service
outcome quality and peace-of-mind, the uncontrollable PTP dimension

8
J.R. Siqueira et al.
Fig. 8. Posterior density for the linear parameter relating CX and WOM.
Table 2
Numerical results.
Parameter Mean SD MC Error 2.5% Median 97.5%
PTP-CX 0.3260 0.054 6.415E-4 0.2210 0.3258 0.4320
SOQ-CX 0.3321 0.062 8.275E-4 0.2099 0.3319 0.4569
POM-CX 0.3067 0.063 8.292E-4 0.1833 0.3063 0.4329
CX-WOM 0.5937 0.051 5.912E-4 0.4952 0.5927 0.6979
exerts an equally strong influence in CX. As a matter of fact, its influence
on CX turned out to be higher than POM’s.
The endorsement of the link between peer-to-peer quality and
customer experience holds a profound significance to the service in­
dustry. PTP can be considered an expression of consumer WOM and as a
communication outlet it can harness the will of existing consumers to
share their experiences and cause other customers to do the same. This is
a finding that can be important for companies since compared to
traditional marketing actions, WOM is viewed by consumers as more
credible than advertising and requires lower investment on the part of
companies (Ahrens et al., 2013). It is also more persuasive than tradi­
tional advertisements (Wirtz and Chew, 2002), as customers trust other
customers’ opinions more than the advertisements produced by the
company itself. Additionally, due to the increase in the number of
channels available to consumers, the consideration they place on
multi-channel encounters with a provider has increased in importance,
affecting their deliberation when qualifying their experience, instead of
focusing on the sum of individual episodes (Chandon et al., 2005). For
this reason, peer-to-peer interaction can cause customers to rely even
more on interpersonal communications within a service environment
due to the latter’s intangible and experiential nature. The interaction of
peers is also important because companies cannot exert any form of
control over the exchanges that take place within their physical envi­
ronment, nor the resulting interpersonal influence process that develops
among customers. Within this particular scenario, CX becomes suscep­
tible to the influence of an informal exchange process where information
can be sought out as well as provided (Engel et al., 1995).
The relationship between service outcome quality and CX was also
supported. Obtaining the expected result from a shopping trip with a
lower financial or time cost was found to have an important influence in
the respondents’ perceptions of their experience. This finding further
highlights the importance of meeting customers’ expectations efficiently
in order to influence their perception of product or service superiority.
Peace of mind was also found to have a positive influence on CX,
attributed to customers’ perceptions of service provider expertise and
the support provided to consumers during the purchase process. Ease of
purchase reassures the consumer, increases consumer confidence in the
provider and also highlights the need consumers have to address their
loss aversion sentiment.
The results also indicated the existence of a strong relationship be­
tween CX and WOM intention. Even taking into consideration the ho­
listic nature of CX, the three dimensions proposed for this study
provided enough explicative power to support the CX-WOM relation­
ship. This further reinforces the claims that the appropriate design of a
customer experience program can influence how customers feel and
9
Journal of Retailing and Consumer Services 53 (2020) 102009
share the tales behind services provided to them. Our results show that
CX exerts a considerable influence on consumer WOM intention (0.594).
This is important because WOM is acknowledged as one of the most
important outcomes of service quality in current literature, due to its
demonstrated capacity to influence purchasing behavior (Pine and Gil­
more, 1998) and produce excess financial returns (Klaus and Maklan,
2012). WOM is particularly important for service providers because of
the intangible nature of services that forbid consumers from trying
anything before buying it (Zeithaml et al., 1985). WOM can have a
significant managerial impact because of the influence the
consumer-to-consumer relationship has on purchase decision-making in
the marketplace (Katz and Lazarsfeld, 1955; Villanueva et al., 2008),
with two-thirds of consumer product sales being attributed to WOM
(Solomon, 2014).
Lastly, this is the first CX research model developed based on a
Bayesian approach developed to test an integrative model developed
from dimensions previously investigated through more traditional SEM
approaches. By utilizing this approach we were able to extract infor­
mation about the relationships/links between the latent constructs
(nodes in Fig. 1) from observations of multiple measurement items,
which are noisy representations of these measurement items. This in­
formation takes the form of a linear relationship, though there is flexi­
bility in the model to accommodate for non-linear approaches, if
reasonable. The latent-construct approach embedded in SEMs is natu­
rally built in Bayesian inference, where latent constructs underlying the
observed measurement items are merely another set of unknown pa­
rameters within the joint distribution. The results show marginal dis­
tributions we extract from the (joint) posterior distribution of the linear
relationships between the latent constructs, which account for different
sources of uncertainty in the inference. Indeed, one key contribution of
our approach is that we are able to model the multiple sources of in­
formation and noise (intra-item, between-item, intra-construct and
individual-based) in a seamless joint manner, which flexibly models the
relationships and is computationally tractable and intuitive. Further­
more, as already indicated, it does not rely on large-sample frequentist
properties to provide meaningful results, which is especially appealing
in scenarios with hard-to-collect, noisy or even missing information.
7.2. Managerial implications, limitations and future research
As one of the first studies to explore CX within the Latin America
geographical context, this study, even with its limitations, provides a
good starting point for further understanding of CX in the retail sector of
emerging countries. To start, the model used in the current study was
tested using a self-administered survey. As the research instrument
utilized collects data of both explanatory and dependent variables from
the same subject and source there is the potential that results can be
affected by common method bias. This is a potential limitation of this
study and its results therefore must be analyzed with caution. Taking
into consideration the possibility that recall bias might have influenced
the results, the validity and strength of the current findings might be
enhanced through the utilization of experiments in future studies.
Additionally, the participating sample consisted of university students
and would benefit from replication with nonstudent subjects before any
universal principles are generated. Findings such as the ones presented
in this study should not be used to draw gratuitous conclusions, but
rather to emphasize the importance of replications in the generation of
knowledge (Peterson, 2001). Another limitation of this study is its re­
striction to a single country in Latin America. There is still a tendency in
managerial circles to see Latin American as a single culture, even though
each country has its own distinctive features that exert influence in the
way its people behave (Diallo and Siqueira, 2017).
While some of the research on CX focuses solely on the capabilities
required to support a CX management program (Homburg et al., 2017a;
Karpen et al., 2017), plenty of literature on CX suggests that the presence
of other customers represents a significant external factor and retail
J.R. Siqueira et al.
firms should, therefore, asses how truly influential this group is. This
study proposes a CX model that compares the impact of internal and
external experiential touch points and provides a tool that can be used
by such organizations as an initial step to manage their influence
(Kranzbühler et al., 2018). The success of a CX program relies on the
planning, development, management, staging and, ultimately, the suc­
cessful delivery of an experience that will imprint positive and
remarkable memories in the minds of customers (Pine & Gilmore, 1999).
Unless managers define a clear and specific scope for a CX program, and
design an adaptive and achievable development plan to build capabil­
ities over time, previous mistakes of process-led marketing programs
will continue to be repeated, producing lackluster results (Boulding
et al., 2005). From the perspective of managers, the findings presented
here provide a solid starting point in the development of a CX program
that can be implemented in various retail formats. It offers a simple
model examining the impact of controllable touchpoints, represented by
service outcome quality and customer peace-of-mind, and one uncon­
trollable touchpoint, represented by PTP interaction, on CX and its
subsequent impact on customer WOM intention. Even though a
non-brand-owned touch point, such as peer-to-peer interaction, cannot
be directly controlled, retailers can attempt to exert more influence over
it to persuade patrons to share positive experiences with other patrons.
Managers should encourage customers to seek out other customers while
in-store to inquire about their experiences with products or services they
are purchasing. For example, when studying the impact of other cus­
tomers in retail banks Van Tonder and Petzer (2018) suggested that
these organizations should involve other customers in the persuasion
process. On the other hand, dimensions such as service outcome quality
and peace of mind can be fully controlled by the service provider and
should be actively managed to support the delivery of a stronger
customer experience. In the case of service outcome quality, managers
should strive to decrease the overall customer’s transactional cost by
reducing wait times and increasing the presence of sales personnel to
facilitate the acquisition process. The ability to positively address a
customer’s peace-of-mind is particularly challenging in a
service-intensive environment, such as the retail industry, because the
intangible nature of its service component tends to increase consumers’
perception of risk (Levitt, 1981). This essentially means that by
improving the manner in which these items are experienced by con­
sumers, their overall assessment of an experience can have a more
positive impact, which in turn can affect their will to tell or recommend
a provider to friends and family. Managers can help mitigate customer
perception of risk by establishing clear service or product guarantees
that help backup the retailer’s reputation.
Despite the aforementioned limitations, the findings reported in this
study contribute to further the understanding of the role WOM plays in
the overall CX process. In order to gain a better understanding of both
constructs, it is important to learn what customers truly value in their
service experiences and how these insights can be leveraged. Even
though the model proposed was limited to a small subset of variables, it
provides a good starting point for companies willing to learn more about
CX. Because of CX’s holistic nature and the unique characteristics of the
various companies that comprise the retail sector, it is very difficult to
produce an all-encompassing CX model. Further research on CX should
focus on other constructs, such as the impact of store front-line em­
ployees on CX, the impact CX has on electronic WOM and should even
attempt to establish a more tangible connection between CX and firm
profitability. Companies need to expand their reach from deeply rooted
operating models that emphasize control and efficiency to include fac­
tors such as customer interaction in order to design more wholesome
experiences that do not fracture customers journeys and end up frus­
trating customers. Regardless of occurring in a positive or negative
manner, customers’ perception of service experience is influenced by
other customers. Therefore, it is important that organizations develop a
positive culture that supports the interactions where positive informa­
tion exchange can occur between customers (Kim et al., 2018).
10
Journal of Retailing and Consumer Services 53 (2020) 102009
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.jretconser.2019.102009.
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