customers represent an opportunity to increase competitive advantage. Example: online investment services
Self-efficacy = task-specific confidence, confidence in online investment ability. Does is affect investment performance, i.e., actual profits, and service evaluations? If so, how is it influenced by consumers’ information search? When confronted with online self-service options, customers often need to deal with multiple information sources , including those that extend beyond the information provided by the firm, such as online magazines and consumer communities.
In this study we let consumers read and evaluate three different information sources (firm, third-party, peer). They are also asked to indicate their level of self-efficacy after reading each source. Finally, they are asked to make an investment decision based on this information and indicate their future usage intentions, perceived value, and perceived performance.
Respondents could browse freely on each site for as long as they wanted.
source evaluations, such as credibility and argument quality, influence novice customers’ self-efficacy during information search because these serve as informational cues. It is important to note that this process is mainly applicable to novice consumers, as these consumers will not be able to rely on previous experience to form self-efficacy judgments. Specifically, third-party credibility and firm argument quality affect self-efficacy more than the other sources. Firm information is inherently biased, because the firm has a financial stake in the consumers’ decision resulting from the provided information (Beales et al. 1981). Therefore, firm credibility carries low information value for consumers, even if that firm is a bank recommending in which stocks to invest, and consumers are forced to focus mainly on argument quality. Surprisingly, the effect of the peer source is less than the third-party for credibility and the firm for argument quality. Since this is a forum of private investors, it is difficult to determine the expertise of the people who post. Especially for novice consumers it is difficult to verify the usefulness of this source, thus it makes sense to make less use of the peer source than of the other sources.
Both credibility and argument quality increase self-efficacy, whereas amount of information search does not. Engagement: credibility stronger effects, argument quality less effect.
This study took place in 2006 before credit crisis! Profits are corrected for overall positive market development of AEX stocks.
Our finding that self-efficacy sometimes deteriorates during search has serious implications for marketers; providing more information to customers is not always beneficial. Most likely, a lack of motivation to spend effort on reading and using information causes the negative effects. Thus, unless investors critically assess the information provided, this information may be useless. This means that overconfident customers are a real problem for service providers, even though this group is relatively small. Setting realistic service expectations before trial is pivotal to ensure service satisfaction. In addition, being able to spend less effort on search while still receiving all required information (e.g., by providing a summary section in addition to more detailed task information) will probably serve these customers better. In general, convincing consumers that spending high effort pays off for them is the biggest challenge service firms face.