The Value of a VIP’s Guest: Word-Of-Mouth Reactions to Preferential Treatment

While research has examined the implications of consumers receiving versus consumers not receiving preferential treatment (i.e., VIPs vs. non-VIPs), the present research diverges by examining a third group of consumers: guests of VIPs. Guests are individuals who share in the preferential treatment received by VIPs not because they have earned this right due to their brand loyalty or purchase volume, but rather because many loyalty programs entitle a VIP to bring others (e.g., family member, friends, colleagues). In a series of five studies using a variety of methods (surveys, lab experiments, field studies, secondary data), we demonstrate the value of firms allowing VIPs to bring a guest. In particular, we find that guests of a VIP are more likely to share positive WOM about preferential treatment experiences as compared to VIPs. This effect arises for two reasons: 1) status transfers from the VIP to guest (i.e., it is contagious) and 2) VIPs’ feeling of status satiate with repeated experience, and feelings of status are a driver of WOM.