Don’t Call Me “Brand Loyal”: The Role of Market Metacognition on Market-Related Labeling Effectiveness

Labeling a customer as being “brand loyal” is a common marketing practice. Building on the literature on social labeling, marketplace metacognition and skepticism, we investigate the effects of such a practice. We find that skepticism, conceptualized as an expression of marketplace metacognition activation, mitigates labeling effectiveness. More precisely, the label is effective only when it does not trigger skepticism, i.e. when the label is congruent with self-perceptions. However, when the label is not congruent with self-perceptions, it arouses skepticism and has a negative impact on future loyalty intentions. We discuss the implications for customer relationship management.