Restaurant membership fee and customer choice: The effects of sunk cost and feelings of regret

Membership marketing is highly prevalent in today's restaurant industry. The purpose of the study was to examine the joint effects of membership fees and competition on customer choice, willingness to join other programs and feelings of regret in a restaurant setting. Using a 2×2×22×2×2 experimental design, the study found that the effect of sunk cost and mental accounting do exist. Moreover, high levels of regret were detected when a higher membership fee was paid and when the competition provided superior service or a lower membership fee. However, when the membership fee was low, customers were more reluctant to go to another restaurant that offered a membership program. Marketing implications for restaurateurs are discussed.