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B2B Marketing: Situational Characteristics as Moderators of the Satisfaction-Loyalty Link
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Transcript of B2B Marketing: Situational Characteristics as Moderators of the Satisfaction-Loyalty Link
Situational Characteristics as Moderators of the
Satisfaction-Loyalty LinkAn Investigation in a Business-to-Business Context
Florian v. WangenheimUniversity of Dortmund
In business, the relationship between satisfaction and loyalty is of fundamental importance.
A study of 425 European businesses was conducted with results showing that the relationship between them is dependent on different contextual factors.
When analysing the results, they pointed towards focusing on specific customer groups as opposed to the price of the product.
Overview
It is assumed that higher levels of loyalty equate to higher levels of success in the marketplace.
Evaluating what it is to be a loyal customer (if dependent on satisfaction) proves to be challenging as we need to understand the asymmetries between them.
It is possible to infer that differences do occur between the satisfaction-loyalty link and from this; it may be possible to segment customer groups accordingly.
Overview
A strong desire for a business to business application of such research is called on to confirm such findings.
In the paper, hypotheses in the business to business market are tried and tested and further elucidation of their results show some interesting indications.
Overview
Overview of the Hypotheses
H1: The more satisfied a customer is, the higher her/ his loyalty will be.
H2: The relationship between satisfaction and loyalty is stronger when perceived purchase
importance is high. H3: The relationship between satisfaction and loyalty is
weaker when perceived purchase uncertainty is high.
H4: The relationship between satisfaction and loyalty is weaker when switching costs are high.
H5: The relationship between satisfaction and loyalty is stronger for old than for new customers.
Positive relationship Loyalty: “deeply held commitment to rebuy a
preferred product or service in the future” (Oliver, 1997).
Loyalty is based upon relationships. Relationship Satisfaction View (Kelley, 1959) believes
that satisfying experiences increase the motivation for customers to remain in a purchasing relationships.
Expectations of future costs and benefits are also influenced by these prior experiences in this relationship.
Satisfaction and Loyalty
Satisfaction Loyalty
Perceived Purchase Importance
Product Importance: “the buyer’s perception of the significance of the buying
decision.” (Bunn, 1993)
“The buyer will take into consideration the future impact of the purchase to the functioning
firm.” (Bunn, 1993)
Strong Purchase Importance
Small Differences in Expected and Actual Levels of Performance being Noticed
Bigger Chance of Product Termination due to Trust being Broken
Perceived Purchase Importance
When perceived purchase importance is taken into account, the relationship between satisfaction and loyalty may be even stronger.
High Perceived Importance
More Thorough Research
Better Information on the Product/Service
High Degree of Purchase Uncertainty
Low Commitment of the Customers
Low Resistance to Marketing Efforts and Price Tactics of Competitiors
Perceived Purchase Uncertainty
Even if the degree of the customer satisfaction is high, the customer loyalty tends to be lower if the customers feel uncertain about the quality of the product/service
Switching Costs
Transaction-Specific Investments
Switching Suppliers Strongly Inhibited
In case of dissatisfaction, high switching costs can still outweigh switching benefits.
Duration of Customer Relationship
DURATION = LOYALTY Duration of business relationship
ONLY as a behavioral variable Independent of attitudinal loyalty
?
Duration of Customer Relationship
New Customers VS. Old Customers
Driven by the “newness” of the
situationTransactional
Low satisfaction-retention link
Rely on past experiencesRelational
Stronger satisfaction-retention link
Cumulative TIME rather than one-time satisfying experience
satisfaction
loyalty
Duration of Customer Relationship
Hypothesis 5:
“The relationship between satisfaction and loyalty is stronger for old than for new customers.”
German Market for Industrial Energy Design Necessary service Buying decisions reviewed by a single person Recent liberalization of German energy market
Trained interviewers conducted the survey via telephone (total of 418 questionnaires)
Samples randomly drawn
Research Method
Research Method
Scales from previous researches were used Measuring customer satisfaction and customer
loyalty
Results and Discussion
Satisfaction = Loyalty
HYPOTHESIS 1: STRONGLY SUPPORTEDSatisfaction exhibits positive, statistically
significant influence on both types of loyalty.
HYPOTHESIS 2: PARTIALLY SUPPORTED High Purchase Importance stronger
relationship between satisfaction and active loyalty.
No significant findings for passive loyalty. HYPOTHESIS 3: PARTIALLY SUPPORTED
High Purchase Uncertainty weaker relationship between satisfaction and passive loyalty.
No significant findings for active loyalty.
Results and Discussion
HYPOTHESIS 4: PARTIALLY SUPPORTED High Rate of Switching Costs weaker
relationship between satisfaction and active loyalty.
No significant findings for passive loyalty. HYPOTHESIS 5: FULLY SUPPORTED
Effect on old customers > effect on new customers
Results and Discussion
Managerial Implications
Long term relationships customers Investing in service quality and increasing
satisfaction will increase retention rates and loyalty behavior
New customers Investing in service quality and increasing satisfaction
must be based on a careful cost-benefit analysis, as they are more likely to defect, since high satisfaction is not a strong predictor of retention for them.
The effect of satisfaction is stronger on active than passive loyalty.
Limitations and Future Research
Limitations Not generalizable as
the sample was limited to one industry and one country.
Some hypotheses were not confirmed.
Future research Test if the effect could
be confirmed in other industries.
Thank you for listening!