The differential effects of separated vs. unseparated services: The roles of performance risk and regulatory focus

Purpose: The purpose of this paper is to examine the effects of service separation on perceived value and intention to enroll in the higher education context, as mediated by perceived performance risk and moderated by an individual’s regulatory focus. Design/methodology/approach: Four experimental studies were conducted, a pilot study and three main studies. Participants evaluated higher education courses offered in either the unseparated (on-campus) or separated (online) mode. Findings: Results show that: service separation influences perceived value; this effect is mediated by performance risk; and moderated by regulatory focus. Specifically, participants perceive higher education courses offered in the separated mode to have greater performance risk, which lowers their perceived value. This effect is enhanced for prevention-focused participants and mitigated for promotion-focused participants. Finally, service separation is found to influence intention to enroll in a course via performance risk and perceived value. Practical implications: The findings suggest that higher education providers need to better understand students’ regulatory focus. In particular, online education providers should target potential students who are promotion-focused and implement strategies to reduce performance risk, which would give students greater assurance that the online course will be delivered as promised. Originality/value: The present research is the first to examine the effects of service separation in the context of higher education, which has received relatively little attention in the services marketing literature. In particular, the findings shed new insights on the mechanisms underlying consumer perceptions of separated vs unseparated service offerings, which contribute to research on services marketing and higher education.