Guest article by Lisa Bruggen.
I would like to take you on a little journey – and please bear with me.
Please think of yourself during retirement. Imagine the days, weeks, months, and years. Think about where you will be or won’t be. Think about what you will or won’t be doing. Think about how you will be living. Try to actually see yourself as retired and imagine the relationships you will have with friends and family. This could be your social life, the number of friendships you have, and the support you get from your family and friends. Think about where you will live, the car you might drive, or the holidays you will go on. Please take a few seconds to form this impression. Do you have a clear picture?
Now, I would like you to think about your retirement planning. Do you have a clear idea of where you stand with respect to your retirement planning? If this picture is less clear, you confirm research evidence that people spend less time planning for retirement than buying a flat-screen TV or tablet. In fact, 64% of people would rather iron or vacuum than engage in financial planning.
For years, I have been fascinated by the fact that people understand the importance of retirement planning yet do not engage with it. This lack of engagement emerged in many of my research studies and was confirmed in collaborative projects and field studies with the retirement industry. The lack of customer engagement is one of the major challenges for this industry.
And an interesting and financially as well as societally relevant service sector it is. Everyone hopes to get old and will need a stable income during their later years, making retirement planning essential. This sector also handles significant amounts of money, underscoring its economic significance. However, retirement planning is inherently complex and vastly different from other service settings, as it involves extremely long-term decision-making.
To find evidence-based solutions to increase customer engagement with retirement planning, Jenna Barrett, Elina Jaakkola, Jonas Heller, and I turned to the customer engagement literature for answers. We hoped to learn what could be done to increase customer engagement. While reviewing the literature, it became apparent that this rich and diverse field did not provide direct insights into the problem we were trying to solve.
The EUREKA moment was when we realized that service research on customer engagement is primarily preoccupied with brands and pleasure-driven services—such as theme parks where engagement is virtually assured—and offered limited guidance. This research was motivated by the realization that the assumptions held about what drives customer engagement did not seem to apply to settings such as retirement planning.
We wondered why customers are so engaged with some brands and services, whereas they neglect others. Our research started by comparing retirement planning to other engagement contexts, but soon we realized that the challenge is not unique to retirement planning. Conventional understanding of customer engagement often revolves around the notion that customers engage with brands or services for enjoyment and positive emotional experiences. Yet, for practical services like utilities or financial planning, where outcomes take precedence over pleasure, this may not hold true. Customers usually choose services like car washes or dental check-ups for their practical benefits, not for pleasure or enjoyment.
This research bridges the gap between assumptions about customer engagement and the distinct features of utilitarian and hedonic service contexts. By analyzing fundamental features that distinguish hedonic versus utilitarian services—such as affectivity, motivational focus, perception of necessity, role of risk, and relational focus—we developed propositions that shed light on how these features influence customer drivers, firm drivers, and outcomes of customer engagement.
We believe that the customer engagement literature can be meaningfully expanded by studying how features of the service context contribute to the drivers and outcomes of engagement, both for firms and customers. While the customer engagement literature is already maturing, our study shows that there is tremendous growth potential left. We hope that our article stimulates new research that disentangles how features of the service context affect customer engagement.
Barrett, Jaakkola, Heller & Brüggen (2024), Journal of Service Research.
Lisa Bruggen
Professor of Financial Services, Maastricht University
Professor of Pension Communication and Decision Support, Tilburg University
