Predicting negative consumer reactions to services offshoring

Abstract

Purpose The purpose of this paper is to examine behavioral changes by consumers (i.e. changing time of day they contact a firm, requesting a domestic service provider, and ceasing doing business with the firm) when faced with being provided a service from abroad. Design/methodology/approach Data were collected from a pre‐recruited internet panel of 394 American consumers. Hierarchical regression analysis, including demographic and psychographic variables, was employed to determine which variables were instrumental in predicting behavioral changes among consumers when being provided a service from abroad. Findings The results suggest that American consumers are wary of services offshoring and that psychographic variables (boycott issue importance and negative word of mouth) are more instrumental than demographic variables in predicting behavioral changes by consumers. Research limitations/implications Future research should examine consumer attitudes about services offshoring from populations in countries other than the US, and in relation to different types of services and the importance of those services to consumers. Practical implications Implications for firms include assessing their customer's perceptions of offshoring, proactively communicating with customers about offshoring practices, and providing customers with some control over their service interactions. Originality/value Previous researchers have highlighted the benefits of services offshoring to firms but also hypothesized that consumers may react negatively when provided services from abroad. In this research, it is found that consumers will change the way they interact with a firm when faced with being provided a service from abroad.