HOW TO CREATE SATISFACTION?
Customer Satisfaction in Business-to-Business Relationships
Date for ventilation: 2009-05-28 Bachelor Thesis
Uppsala University Authors:
Business Department Tomas Henriksson
A
BSTRACT
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ONTENTS
1. INTRODUCTION 3
1.1PROBLEM FORMULATION 4
1.1.1BACKGROUND OF THE STUDIED COMPANY AND THEIR RELATIONSHIP WITH CLIENTS 4
1.2PURPOSE AND RESEARCH QUESTION 5
2. A FOUNDATION FOR CUSTOMER SATISFACTION 6
2.1WHY IS CUSTOMER SATISFACTION IMPORTANT? 6
2.2WHAT AFFECTS CUSTOMER SATISFACTION? 6
2.2.1EXPECTATIONS AND HOW THEY ARE MET 7
2.2.2DIFFERENT PARTS OF AN OFFER 8
2.2.3SUBJECTIVITY 8
2.3DIFFERENCES IN CUSTOMER SATISFACTION IN B2BRELATIONSHIPS 9
2.4MODEL DEVELOPED FOR THE STUDY 11
3. RESEARCH STRATEGY 13
3.1RESEARCH APPROACH 13
3.2DATA COLLECTION 13
3.2.1SURVEY TOOLS 13
3.2.2SURVEY QUESTIONS AND RESPONSE FORMAT 14
3.2.3DATA PROCESSING 15
3.3POPULATION AND SAMPLE 15
3.4VALIDITY AND RELIABILITY 15
4. CUSTOMERS’ VIEWS ON SATISFACTION 17
5. HOW CUSTOMER SATISFACTION IS AFFECTED 22
5.1EXPECTATIONS AND HOW THEY ARE MET 22
5.2DIFFERENT PARTS OF AN OFFER 23
5.3SUBJECTIVITY 25
6.1IDENTIFIED FACTORS AFFECTING CUSTOMER SATISFACTION 27
6.2PROPOSALS FOR FUTURE RESEARCH 28
7. REFERENCES 30
APPENDIX I: QUESTIONNAIRE 33
APPENDIX II: RESULTS 39
APPENDIX III: HYPOTHESIS TESTING FOR CORRELATION BETWEEN HOW
1.
I
NTRODUCTION
The economy during the first half of the twentieth century was different from what it is today. Companies tended to be concentrated on manufacturing and productivity. Wealth was created by selling large quantities of goods to the mass market. What customers needed and wanted was neglected (Fornell, 2007, p.17). A general assumption was, and to some extent still is, that if a company becomes more productive, many benefits such as economic growth will follow. However, this is not always the case. There is a strong negative relationship between company productivity and customer satisfaction. According to Fornell (2007), many companies have too much focus on productivity. For example, service companies often see themselves as manufacturers instead of service providers. But why then can a strong focus on productivity be harmful for companies? Productivity is basically about doing more with fewer resources and it is difficult to maintain the same quality and service. This is especially difficult for service companies. Unlike companies that produce pure goods, services are co-produced by seller and buyer. The interaction between the seller and buyer and the performance of the seller is what determines the value and quality of the service. If companies reduce their workforce in order to increase productivity, the service quality is likely to decline.
“Declining customer satisfaction reduces demand and sets in motion a vicious circle of effects that includes erosion of firms’ economic value, labor uncertainty, and, ultimately, slower economic growth” (Fornell, 2007, p. 14).
1.1 Problem Formulation
As customer satisfaction has become more important, there has been a lot of research done in this area in business-to-consumer (B2C) markets. In these cases, the consumer is seen as a private person consuming goods. However, literature on business-to-business (B2B) relationships has mostly been focusing on the purchase process. Post-purchase outcomes and customer satisfaction have, until recently, been neglected within this segment (Cronin, 1989; Molinari et al. 2008; Rossomme, 2003). This is despite the importance of the B2B segment. As stated in the previous section, customer satisfaction is crucial for a supplier company’s success. Just producing without listening to the customer is not a viable option these days. Paying attention to what the customer wants and adapting to it is of great importance. Many supplier companies have realized this and the creation of fruitful relationships between client and supplier companies have increased in the past years. Academic literature on B2B has also acknowledged these relationships and networks (O’Donnell, 2000; Andersson et al., 2002; Gummesson, 1998). But, as stated earlier, work on customer satisfaction is sparse. This leaves a need for more research on customer satisfaction in B2B relationships. What is customer satisfaction in business markets? What creates customer satisfaction in B2B relationships? Is there any difference between customer satisfaction in business markets compared to B2C markets?
1.1.1 Background of the Studied Company and Their relationship With Clients
is interesting to examine which factors affect IT©’s customers’ satisfaction.
When buying a product, the buyer in a company faces many decisions depending, on the type of buying situation. In B2B, there are three main buying situations: straight rebuy, modified
rebuy, and new task (Kotler et al, 1999, p. 283). The company and customers used for this
study mainly operate in straight rebuy situations. The other two situations occur as well, but as these are less common, they will not be the focus of this study. In straight rebuy situations, customers reorder a product without modifications. The situation is handled by the purchasing department, usually on a routine basis. In many cases, the buying process is automatic to save time and money for both buyers and suppliers (ibid.). When B2B is mentioned in the text, it refers to this buying situation. Additionally, B2B in this study refers to companies who are buying consumption goods from a supplier company. This is because IT©’s customers are purchasing goods for their own consumption, not goods which are used in their production.
1.2 Purpose and Research Question
The aim of this study is to increase the understanding of how customer satisfaction is created in B2B relationships in the copy machine and IT-solutions market from the customer’s point of view. Through this, an ambition is to denote indicators which increase customer value. A single company, IT©, will be used as a platform and their customers will be the target of the study. A final aspiration with this study is to contribute to the small, but growing literature on the topic of customer satisfaction in B2B settings. To fulfill the purpose of this study, the following questions have been formulated:
Which factors affect customer satisfaction in a business-to-business relationship with IT©?
2.
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ATISFACTION
In order to answer the research questions and to fulfill the purpose of the thesis, a theoretical framework is needed to define factors that affect customer satisfaction. Furthermore, a model will be developed from the theoretical framework, which will allow an analysis of the empirical study.
2.1 Why is Customer Satisfaction Important?
The key to business performance is the ability to satisfy and retain customers (Johnson & Gustafsson, 2000). Customer satisfaction is important because it says something about the company’s current condition. But even more importantly, customer satisfaction says something about the company’s future. It reveals if customers will return to the company in the future (Fornell, 2007, p. 45). It does not matter how productive a company is if their customers are not satisfied with their offerings. They will simply take their business elsewhere. Satisfied customers, on the other hand, are more likely to return in the future. Customer satisfaction and thus customer consumption are the center of business. All parts of business (employment, prices, profits, production, economic growth etc.) are dependent on customers consuming products (Fornell, 2007; Johnson & Gustafsson, 2000).
“Satisfied customers are not only the sum total of the value of all other company assets – virtually all costs and revenues have some relationship, however weak or indirect, to customer acquisition and customer retention” (Fornell, 2007, p. 66).
To create long-term profit and shareholder value, companies need to think of customers as investors and an economic asset. It is the customers that bring financial revenue to companies. Hence, customers are companies’ greatest asset (ibid.).
2.2 What Affects Customer Satisfaction?
2.2.1 Expectations and How They Are Met
One important aspect of customer satisfaction is what expectations the customers have of the product. One definition of expectations made by Sheth (1973, p. 52) is:
“Expectations refer to the perceived potential of alternative suppliers and brands to satisfy a number of explicit and implicit objectives in any particular buying decision.”
These objectives can be product quality, delivery time, quantity, service, price, etc. Different individuals tend to have different expectations of products. The reasons for this are the background of the individuals, the amount of information he/she has and seeks, and the amount of satisfaction with past purchases (Sheth, 1973, pp. 52-53). There is also a point in differentiating between varying levels of expectations. These different levels are a buyer’s ideal expectation level, deserved level (where benefits is equal to costs), minimum tolerable level and anticipated level (Cronin, 1989, pp. 41-42).
2.2.2 Different Parts of an Offer
Söderlund (1997) states that a product can be seen as different parts, which individually create satisfaction. The customer can be satisfied with some parts of the offer and dissatisfied with others. The different parts of an offer can be divided into a variety of groups. Examples of the parts are perceived service, treatment from the supplier, delivery time, reliability, etc. (Seth, 1973; Söderlund, 1997). The customer can also view the product as a compound of the different parts and create an overall satisfaction (Söderlund, 1997, pp. 42-43).
Another way to look at the various parts of an offer is the classic 4P model; the marketing mix. This model consists of product, price, place and promotion. The product1 is tangible in form of goods or intangible in form of services. The price is the amount a customer pays for the product. The place is the distribution channel where the product can be purchased. The promotion represents all communication that a company or a marketer may use in the marketplace. This communication can be advertising, public relations or word-of-mouth (Jobber & Fahy, 2003).
Studies regarding services show that some parts of the offer affect satisfaction more than others. The part that has the strongest critical effect on satisfaction and often causes dissatisfaction is core-service failure. Core-service failure consists of service mistakes, such as contracts that are filled incorrectly; service catastrophes, in which the service provider actually causes damage to the customer; and billing errors. The second most critical part is service encounter failures, in which failure happens in the interaction between the service provider and the customer. The third most critical part is pricing, which does not necessarily have to do with a high price but rather with a price that the customer feels is not legitimate in relation to the product quality (Richman, 1996, p. 9).
2.2.3 Subjectivity
According to Söderlund (2000), customer satisfaction can be seen as an attitude that is based on experiences and subjectivity. Customer satisfaction is a state of mind that the customer has (Söderlund 1997; 2000). This state of mind is a result of being exposed to offers and taking part of transactions with suppliers. It can be described as an emotional reaction connected to the customer’s own experiences (Söderlund, 1997, pp. 37-40). Furthermore, customer satisfaction is subjective in the sense that it is the customer who subjectively evaluates his/her
1
state of mind, regardless of what is “correct” from an objective point of view (Söderlund, 1997; 2000). That customer satisfaction is a customer’s subjective evaluation means that how customers view satisfaction differ from each other. The customers’ view of their purchase is colored by their biased interpretation of their purchasing experience. Also, customers as a group view satisfaction differently than suppliers (Söderlund, 1997, pp. 38-40).
2.3 Differences in Customer Satisfaction in B2B Relationships
The areas just discussed affect satisfaction both in B2B and B2C settings. However, customer satisfaction in B2B relationships is different compared to B2C relationships in many ways. It is also regarded as being more challenging to measure. Five major differences have been identified:
1. Satisfaction of an entire company is measured.
2. Many people are involved in the procurement and use of the product. 3. Different people have different expectations.
4. A variety of situational and relational factors affect customer satisfaction in B2B relationships.
5. More rational objectives are included in the satisfaction evaluation.
The first difference deals with measuring the satisfaction of an entire company. Traditional customer satisfaction is measured on an individual level, as one person evaluates his/her satisfaction with a product. A company cannot “feel” satisfied; it is the combined satisfaction of the people within the company that constructs the satisfaction (Rossomme, 2003, pp. 180-181).
may have wishes regarding quality and user-friendliness. Who will affect the purchase decision varies from organization to organization and tends to be situation-specific. Different people can also come in contact with the product in different stages. One person can decide which product to buy, a second person can take care of the purchasing process and a final person can use the product. This means that one single person in a company does not necessarily go through the traditional purchase-usage-satisfaction stages. Furthermore, all employees within an organization will not come in contact with the product and even fewer people will use it (ibid. pp. 180-184).
The third difference is that the various people who come in contact with the product tend to have different expectations on the product they are buying. Section 2.2.1, which discussed expectations and the disconfirmation process, stated that people have different expectations on products. Different people in the company, such as buyers and users, tend to value various parts of a product differently and have different expectations on them. The users usually look for fast delivery, proper installation and good service. Buyers appreciate competitive prices and value for money. The difficulty with customer satisfaction in B2B relationships is to satisfy these different individuals at the same time (Sheth, 1973, pp. 52-53).
A fourth reason as to why customer satisfaction is different in B2B versus B2C situations is situational and relational factors. The initial purchase is influenced by situational factors such as economic conditions, strikes, organizational changes, etc. (ibid. p. 56). Situational determinants also affect B2B relationships and thus customer satisfaction. Examples of such determinants are availability of alternatives, dynamism of supply market, importance of supply and complexity of supply. These in turn affect B2B relationships in regard to information exchange, operational linkages, legal bonds, cooperation and adaptation. Closer relationships with a high degree of adaptation are not necessarily correlated with a higher level of customer satisfaction. Studies show that client firms do not want close ties with all their suppliers since this requires time to build the relationship. However, many close relationships also result in customer satisfaction (Cannon, 1999; Goodman et al., 1995). Whether it is positive or not, relationships in B2B contexts tend to be more complex and characterized by interdependence (Molinari et al., 2008, p. 363).
satisfaction judgment process to a larger extent than private consumers do (Rossomme, 2003, pp. 180-181).
2.4 Model Developed for the Study
To have a roadmap for this study, a model has been created (Figure 1) based on the literature presented above. The model has also been adjusted to fit the study object: IT©’s customers. The main areas that affect customer satisfaction are expectations of the product and experience of the product, which is how the expectations are met (i.e. disconfirmation). These two areas also affect each other. Which experience the customers have had with IT&Copy will affect which expectations they have and vice versa. Both of these are influenced by subjectivity and the different parts of an offer.
Figure 1: Model of What Affects Customer Satisfaction in B2B Relationships
Customer
Satisfaction
Expectations of products Experience of products oSubjectivityoDifferent parts of an offer
oSubjectivity
oDifferent parts of an offer
(Source: Own processing)
an employee can be a buyer and a user, three groups have been formed: (1) buyers, (2) users and (3) buyers and users.
For the last area, the different parts of an offer, 15 items have been chosen (Table 1). These have been chosen because they are relevant for IT©’s operation and because they are identified as vital parts of an offer by the literature review.
Table 1: Different Parts of an Offer
1. The products’ quality 9. The way sellers treat customers 2. The products’ user-friendliness 10. The way technicians treat customers
3. Selection of products 11. The way the finance department treats customers
4. Price 12. Time from order to delivery
5. Availability of the staff 13. Time from offer request to offer
6. Technical support 14. Handling of invoices
7. Education provided about products 15. Complaint policy 8. The way the entire staff treats customers
3.
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ESEARCH
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TRATEGY
3.1 Research Approach
To answer the questions “Which factors affect customer satisfaction in a business-to-business relationship with IT©?” and “Out of the factors affecting customer satisfaction, which factors have a bigger versus smaller impact on customer satisfaction?” a quantitative study was chosen. One reason for this is that questionnaires are useful when descriptive research is conducted (Saunders et al. 2003, pp. 281-283). Surveys allow a large sample in an economical manner and easy comparison is allowed if the questions are standardized. Issues with this method can be a low response rate and poorly filled in surveys. Creating the survey itself is also a dilemma since it is important that the right questions are asked as there is no possibility for follow-up questions (ibid. pp. 92). In order to promote a high response rate, the invitation to take the survey was sent out by the CEO of IT©, which hopefully increases the importance of the survey for the customers. The dual purpose of the survey has also been emphasized: to use as a base for this paper as well as a part of an improvement process for IT©. To decrease the risk of poor answers, the survey was designed to be relatively easy to understand and fast for the respondents to fill in. The survey consists of six questions. To ensure that the “right” questions were asked, two people from IT©’s board of directors and a lector at Uppsala University gave feedback to the survey. See Appendix I for the survey.
3.2 Data Collection
3.2.1 Survey Tools
The website chosen for creating the survey was www.surveyconsole.com. This site was chosen because it allowed unlimited respondents and gave the possibility of creating a unique Internet address. It also has basic statistical functions for analyzing the results.
3.2.2 Survey Questions and Response Format
The survey has been created based on the model presented in Figure 1. First, the respondents were asked to rank and state the importance of the items under the different parts of an offer. Then the respondents were asked to judge how well IT© had met their expectations in the same categories. Lastly, the customers were asked to grade IT© using the same categories once again. The reason for this method was to first reveal what expectations the customers had and then see how their expectations were met. It was also possible to see if a category got good ratings because the expectations were low or because IT© actually performed well. Regarding subjectivity, questions were asked to find out if the respondent was a buyer and/or user and which product they bought. As stated previously, customer satisfaction is an individual’s own subjective view of his/her state of mind. Based on this, it is impossible to ask an individual to state how satisfied a company is. Therefore, all questions were designed to only ask the individual to evaluate their own opinions.
3.2.3 Data Processing
The website, surveyconsole.com, used for the online survey has basic analytical tools and was therefore the main instrument for statistical calculations. Means, standard deviations and variance were calculated using this tool. Excel was used for doing a correlation analysis.
3.3 Population and Sample
The population of the research was IT©’s contracted customers who regularly receive invoices. As IT&Copy’s operations revolve around the continuous service they provide to their customers, all customers fall under this category. However, as these customers have an on-going relationship with the company, this will have an effect on their expectations of the company. Another option could have been to focus on new clients, but as these were few in numbers and might have difficulties in grading IT&Copy in different categories, it was decided to survey IT&Copy’s contracted customers. Due to the relatively small population, 900 companies, the entire population has been chosen as the sample. This type of sampling is called census sampling and it is a good option if the company wants input from all customers. It can, however, be quite costly and time-consuming (Hayes, 1998, p. 85). The customers are all found in the same geographical region, but they vary in size and are found in wide range of industries.
3.4 Validity and Reliability
Out of the 900 companies that were asked to participate, 148 companies completed the survey. This is a response rate of 16.44 % and thus the same amount of the population has participated in the survey. This can affect the validity of the survey as many customers failed to respond. Furthermore, the customers that did respond might share some characteristics, which the population does not have. This can for instance be that they are more satisfied or more dissatisfied than the average. However, the average response rate for this type of survey is 10-30 % (Hayes, 1998, p. 85). Therefore, with a response rate of 16.44 %, the study has been assessed as reliable. Furthermore, as a relatively high percentage of the population participated in the survey, the results are regarded as fair indicators of the population’s opinions.
4.
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In this section, the result of each question in the survey will be presented one by one. The results for questions four to six are presented as means. The “do not know” option is not included in these means. For more in-depth results, see Appendix II.
1. Which products does the company you represent purchase?
Most of the client companies, 69.40 %, are purchasing only copying machines. 21.55 % are purchasing both copying machines and IT solutions. The remaining percent, 9.05 %, are purchasing IT solutions.
2. In your relationship with IT©, how would you like to describe your role?
Out of the respondents, 48.50 % are both purchasers and users. 45.92 % are only users and the remaining, 5.58 %, are only purchasers.
3. Which factors do you regard as being most important when choosing a provider of copying machines and IT solutions? Please rank the categories from 1 to 10.
The three most important factors were the products’ quality, their user-friendliness and the technical support. The least important factors were handling of invoices, selection of products and delivery times (Table 2).
Table 2: Factors When Choosing a Supplier Ranked According to Importance
Ranking 1-10, where 1 = highest ranking and 10 = lowest ranking
Factors Final Ranking
The products’ quality 1
The products’ user-friendliness 2
Technical support 3
Price 4
Availability of the staff 5
The way the entire staff treats customers 6
Education provided about products 7
Delivery times 8
Selection of products 9
4. Of which importance do you regard the following factors when choosing a provider of copying machines and IT solutions?
To complement the ranking above and to give a more nuanced view, the respondents were also asked how important various categories are when choosing a supplier (Table 3). For 15 different categories, the respondents were asked to give ratings on a five-point scale from very unimportant to very important. Technical support was seen as the most important factor followed by the products’ quality and user-friendliness. The three least important factors were selection of products, handling of invoices and delivery times.
Figure 2: Importance of Various Factors When Choosing a Supplier
Scale: 1-5, where 1 = very unimportant and 5 = very important
5. How well does IT©’s performance correspond to your expectations?
asked if IT©’s performance corresponded to their overall expectations, 64.83 % agreed or completely agreed. 22.76 % were neutral (Figure 4).
Figure 3: To What Extent IT©’s Performance Correspond to the Customers’ Expectations
Scale: 1-5, where 1 = completely disagree and 5 = completely agree
Figure 4: How Well IT© Has Met Overall Expectations
Scale 1-5, where 1 = completely disagree and 5 = completely agree.
6,21% 17,93% 46,90% 22,76% 5,52% 0,69% 0,00% 5,00% 10,00% 15,00% 20,00% 25,00% 30,00% 35,00% 40,00% 45,00% 50,00% 1 2 3 4 5 do not know P e rc e n t o f re s p o n d e n ts
6. Which grade do you want to give IT© in the following categories?
the three with the lowest grades are the same ones which corresponded the least to the customers’ expectations; price, complaint policy and handling of invoices. The customers were also asked to give a general grade about IT©’s performance. 72.91 % gave them the grade good or very good. 15.97 % gave them a neutral grade; neither good nor bad (Figure 6).
Figure 5: Grades Given to IT© By Their Customers
Scale 1-5, where 1 = very bad and 5 = very good
Figure 6: General Grade Given to IT©
Scale 1-5, where 1 = very bad and 5 = very good
6,94% 25,69% 47,22% 15,97% 3,47% 0,69% 0,00% 5,00% 10,00% 15,00% 20,00% 25,00% 30,00% 35,00% 40,00% 45,00% 50,00% 1 2 3 4 5 do not know P e rc e n t o f re s p o n d e n ts
between the variables is + 0.86. A coefficient can range from -1 to +1. -1 indicates a negative relationship, 0 indicates no correlation and if the coefficient is close to + 1, it indicates a positive linear relationship (Newbold et al., 2007, p. 66). This means that for this correlation, as the grades go up, the ratings for how the expectations were met are expected to do the same thing and vice versa. Furthermore, a scatter plot including a regression line was made (Figure 7). A hypothesis test was conducted to find out if the population correlation is different from zero (Appendix III). The result indicated at a 0.5 % significance level that there is a positive linear relationship between the two variables and thus, that they correlate with each other.
Figure 7: Correlation Between How Expectations Were Met and Grades
Grade: Scale 1-5, where 1 = very bad and 5 = very good
Expectations: Scale 1-5, where 1 = completely disagree and 5 = completely agree.
3,20 3,40 3,60 3,80 4,00 4,20 4,40 3,20 3,40 3,60 3,80 4,00 4,20 4,40
How expectations were met
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In this section, the results from the survey will be discussed. The three central factors (expectations, different part of an offer, subjectivity) presented earlier in the paper will be discussed one by one.
5.1 Expectations and How They Are Met
As mentioned previously in this paper, how well expectations are met is said to be a key indicator for how satisfied customers are. In this study, the results show that a number of expectations were met and that others were not met to the same degree. In this section, expectations about all the 15 parts of an offer used in the survey and the overall performance of IT© are discussed. The literature review stated that if the expectations are met, the customer is satisfied. For this reason, how well the expectations were met will be compared to which grade the parts received.
that their expectations were met in these parts and that the grades they want to give are somewhere in between average and good.
A few categories deviate a bit from the linear correlation described previously. For a majority of the categories, the ratings for how the expectations were met and the grades they were given were very similar in numerical terms. Note that although these ratings were similar, they mean different things. Three categories do not quite fit into this pattern. The first is the products’ quality which was given a rating of 3.74 in terms of how the expectations were met and a grade of 3.59. These results suggest that the grade is lower than expected. A second category is how the finance department treats customers. How the expectations were met was rated 3.62 and the grade was 3.86. Here the reversed happened; the grade is higher than expected. A last category which showed unexpected results was IT©’s overall performance. How well IT© fulfilled the respondents’ total expectation was given a rating of 3.60 and the general grade given to IT© was 4.01. Other categories with similar ratings for the expectations part received considerable lower grades than the general grade. When it comes to IT©’s total performance, 64.83 % of the respondents state that they agree or completely agree to the statement that IT© has met their overall expectations. The grades show that a slightly larger percentage, 72.91 %, thinks that IT© is doing a good or very good job. It is noteworthy that about 8 % did not feel that their expectations were met, yet they think that IT© is doing a good job. This is contradictory to what the literature says. Furthermore, when IT©’s performance versus the total expectations was evaluated, 12 other categories were regarded as having met the expectations better. However, when the general grade was given, only four categories received higher grades.
5.2 Different Parts of an Offer
products as the lowest rating followed by handling of invoices and time from offer request to offer.
For the sake of determining which of these parts are more and less influential on customer satisfaction, the scores of importance were used as a base. All parts which received a score of 4 or higher on a scale from 1-5 can be seen as very influential parts. This score means that a majority of the respondents gave the category the grade good or very good. A total of eight parts received a score that high: technical support; the products’ quality and user-friendliness; the way technicians, sellers and the entire staff treat customers; availability of the staff; and price. Complaint policy and time from order to deliver were very close to receiving a score that high. Instead, they fall under the group which received a score that was lower than 4. The parts falling under this group, besides the two already mentioned, are: the way the finance department treat customers, education about products, time from offer request to offer, handling of invoices and selection of products.
The group with high importance can be assumed to have a big impact on the total customer satisfaction. The question is if this is the case. When the grades that the respondents gave out are examined, how the technicians, the entire staff and the sellers treat customers and technical support receive a higher grade than the general grade at 4.01. One can therefore state that these should have a positive impact on the general grade. Availability of the staff received a grade almost up to par to the general grade at 3.94. The product’s quality, user-friendliness and price received significantly lower grades. As these very important parts received a low grade, the general grade should have been affected negatively according to the theory. It might be that this had a slight negative impact, but the general grade is still quite high. This makes it difficult to say if these parts had a negative effect or not.
evident; that good relationships can increase customer satisfaction. How the staff behaved towards the customers had a very big impact on customer satisfaction. Furthermore, another denotation can be that in B2B situations, when relationships are very important, other parts, such as quality, user-friendliness and price become less relevant in comparison. The third big failure mentioned in the theory was core-service failure, which included incorrect contracts and billing errors. As the grades given for handling of invoices and the way the finance department received more average grades, there is a chance that this type of failure has been committed to some degree. However, as the general grade is fairly high, it does not seem that this failure had an extensive effect on the overall satisfaction.
5.3 Subjectivity
As stated earlier, subjectivity is a difficult part to measure when doing a study on customer satisfaction. This is because of the fact that subjectivity is an emotional reaction and a state of mind. In this study the respondents were divided in three groups: buyers; users; buyers and users. Most of the participants categorized themselves as both buyers and users (48.50 %) or users only (45.92 %). As so few respondents were only buyers, it was not possible to see if the opinions differed between buyers and users. This is because a correlation analysis could not be done with significance. It was also not possible to notice any differences between clients who bought IT-solutions versus those who bought copying machines as very few respondents purchased IT-solutions. No significant analysis could be made here either.
6.CONCLUSIONS
The main factors affecting customer satisfaction in B2B relationships are presented below. Also, the factors which were shown in this study to have a big versus small impact on customer satisfaction are listed.
6.1 Identified Factors Affecting Customer Satisfaction
From the literature review, three main areas were found to influence customer satisfaction. These were how well the supplier company’s performance corresponded to the customers’ expectations, the different parts of an offer (eg. quality, price, user-friendliness etc.) and the customers’ subjectivity. Based on this, a model was created where the different parts of an offer and subjectivity affect the expectations customers have on the product and how they experience it. These in turn create the customer satisfaction.
How expectations were met was proven to have a strong correlation with how satisfied the customer is with the product, or the different parts of the product. If the expectations are met, the customer is satisfied. Thus, this study gives additional support to one of the main satisfaction theories there are; the dissatisfaction model. However, not all categories that were measured followed this pattern. The largest divergence from the linear correlation was how the total expectations were met and its corresponding variable, the general grade. The general grade was considerably higher than the rating of how the total expectations were met suggested. This indicates that although the total expectations were not quite met, the customers still think that IT© is doing a good job. It is noteworthy that it was the general grade which diverted from the linear pattern.
which plays a vital role in creating customer satisfaction. It might even be the most important factor. One factor which seemed to have a smaller impact on customer satisfaction was price. IT&Copy received a high general grade even though the customers expressed that they were not completely satisfied with IT&Copy’s prices. Reasons for this can be that many of the respondents were users and thus did not need to care about the price or perhaps other variables such as how the staff treats customers were seen as being more valuable.
The parts of an offer which the respondents stated as least important were selection of products, handling of invoices and time from order to delivery. Other parts of less importance were complaint policy, how the finance department treats customers, education about the products and time from offer request to offer. Many of these received low grades, yet the general grade given to IT©’s overall performance was quite high. Therefore, these items listed can be said to have a smaller impact on customer satisfaction. However, based on the study it appears that few of the respondents come in contact with invoices and IT©’s finance department. Therefore, this list might have been different if they came in contact with these areas.
As for the subjectivity part of the research model, the respondents’ subjective point of view when assessing their own feelings must be taken into consideration when the results are analyzed. Most of the respondents stated that they either were users or both users and buyers and what they stated as being important parts of an offer reflected their roles in the companies. Users typically value technical support, quality and user-friendliness and this survey confirmed this as these parts were stated as being most important. However, although they stated these as being important parts, when the respondents gave out grades, it appeared that how they were treated by the staff mattered the most.
6.2 Proposals for Future Research
7.
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EFERENCES
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Strategic Management Journal, Vol. 23, no. 11, pp. 979-996.
Cannon, J. & Perreault, W. 1999. “Buyer-Seller Relationships in Business Markets”. Journal
of Marketing Research, Vol. 36, November, pp. 439-460.
Churchill, G. A. Jr & Surprenant, C. 1982. “An Investigation into the Determinants of Customer Satisfaction”. Journal of Marketing Research, Vol. XIX, November, pp. 491-503.
Cronin, J. & Morris, M. 1989. “Satisfying Customer Expectations: The Effect on Conflict and Repurchase in Industrial Marketing Channels”. Journal of the Academy of Marketing Science, Vol. 17, no. 1, pp. 41-49.
Fornell, C. 2007. The Satisfied Customer – Winners and Losers in the Battle for Buyer
Preference. New York: Palgrave Macmillan.
Goodman, P., Fichman, M., Lerch, J. & Snyder, P. 1995. “Customer-Firm Relationships, Involvement and Customer Satisfaction”. The Academy of Management Journal, Vol. 38, no. 5, pp. 1310-1324.
Grönroos, C. 2007. Service Management and Marketing: Customer Management in Service
Competition. Chichester, United Kingdom: John Wiley & Sons Ltd. 3rd
edition.
Gummesson, E. 1998. Relationsmarknadsföring: Från 4P till 30R. Malmö, Sweden: Liber Ekonomi.
Hayes, B. 1998. Measuring Customer Satisfaction: survey design, use, and statistical analysis
methods. Milwaukee, USA: ASQ Quality Press, 2nd
Jobber, D. & Fahy, J. 2002. Foundations of Marketing. Maidenhead, United Kingdom: McGraw-Hill Education.
Johnson, M. D. & Gustafsson, A. 2000. Improving Customer Satisfaction, Loyalty, and
Profit: An Integrated Measurement and Management System. San Francisco, California:
Jossey-Bass Inc.
Kotler, P. 2000. Marketing Management. Upper Saddle River: Prentice Hall International Inc.
Merchant, K. & Van der Stede, W. 2007. Management Control Systems – Performance
Measurement, Evaluation and Incentives. Harlow, United Kingdom: Pearson Education
Limited.
Molinari, L., Abratt, R. & Dion, P. 2008. “Satisfaction, quality and value and effects on repurchase and positive word of mouth behavioral intentions in a B2B services context”.
Journal of Services Marketing, Vol. 22, no. 5, pp. 363-373.
Newbold, P., Carlson, W. & Thorne, B. 2007. Statistics for Business and Economics. Upper Saddle River: Pearson Prentice Hall. 6th edition.
O’Donnell, SW, 2000. “Managing Foreign Subsidiaries: Agents of Headquarters or an Interdependent Network?”. Strategic Management Journal, Vol. 21, no. 5, pp. 525-548.
Richman, T. 1996. “Service Industries: Why Customers Leave”. Harvard Business Review, January-February,Vol. 74, no. 1 pp. 9-10.
Rossomme, J. 2003. “Customer Satisfaction Measurement in a Business-to-Business Context: a conceptual framework”. Journal of Business & Industrial Marketing, Vol. 18, no. 2, pp. 179-195.
Sheth, J. 1973. “A Model of Industrial Buyer Behavior”. Journal of Marketing, Vol. 37, October, pp. 50-56.
Söderlund, M. 1997. Den nöjda kunden. Kundtillfredsställelse – orsaker och effekter. Malmö, Sweden: Liber Ekonomi.
A
PPENDIX
I:
Q
UESTIONNAIRE
(Own translation from Swedish)
Customer Satisfaction Survey – IT© Uppsala
Dear Customer,
As our customer, you mean a lot to us at IT© and we are therefore working on developing our business to be able to meet your needs in the best possible way. In order to be successful in this matter we need your help and we therefore ask you to fill in a customer satisfaction survey. The survey is being done in cooperation with two students from Uppsala University, whose focus of study is customer satisfaction. The survey will be used as a base for the improvement process that will take place at IT©, as well as a foundation for a thesis that is being written at Uppsala University about customer satisfaction.
Your answers will be treated with strict confidentiality and will be kept anonymous. Estimated response time is 15 minutes. Please note, in order to receive correct answers, we ask you to finish the survey you have started filling in. This means that it is not possible to start filling in the survey and then finishing it at another time.
We appreciate if you fill in the survey no later than Wednesday April 29th. Thank you!
1. Which products does the company you represent purchase?
(Please choose one alternative)
IT solutions
Copying machines
IT solutions & copying machines
2. In your relationship with IT©, how would you like to describe your role?
(Please choose one alternative)
Purchaser of product/service
User of product/service
Purchaser & user of product/service
3. Which factors do you regard as being most important when choosing a provider of copying machines and IT solutions?
Please rank the following categories from 1 to 10 (1 = most important, 10 = least important)
The products’ quality
The products’ user-friendliness
Selection of products
Price
Availability of the staff
Technical support
Education provided about the products
The way the provider’s staff treats customers
Delivery times
4. Of which importance do you regard the following factors when choosing a provider of copying machines and IT-solutions?
1: Not at all important 2: Not important
3: Neither important nor not important 4: Important
5: Very important DNK: Do not know
1 2 3 4 5 DNK
The products’ quality
The products’ user-friendliness
Selection of products
Price
Availability of the staff
Technical support
Education provided about products The way the entire staff treats customers The way sellers treat customers The way technicians treat customers The way the finance department treats customers Time from order to delivery Time from offer request to offer
Handling of invoices
5. How well does IT©’s performance correspond to your expectations?
A number of statements are presented below. Please check the box which matches your views most closely. 1: Completely disagree 2: Disagree 3: Neutral 4: Agree 5: Completely agree DNK: Do not know 1 2 3 4 5 DNK
The quality of IT©’s products correspond to my expectations
The user-friendliness of IT©’s products correspond to my expectations
IT©’s selection of products/services correspond to my expectations
IT©’s price level correspond to my expectations
The availability of IT©’s staff correspond to my expectations
The technical support IT© offers correspond to my expectations
correspond to my expectations
The way IT©’s entire staff has treated me corresponds to my expectations
The way IT©’s sellers have treated me corresponds to my expectations
The way IT©’s technicians have treated me corresponds to my expectations
The way IT©’s finance department has treated me corresponds to my expectations
The delivery time from when I order a product until I receive it corresponds to my expectations
The time from when I request an offer until I receive it corresponds to my expectations
IT©’s way of handling invoices corresponds to my expectations
IT©’s complaint policy corresponds to my expectations
6. Which grade do you want to give IT© in the following categories? 1: Very bad 2: Bad 3: Pass 4: Good 5: Very good DNK: Do not know 1 2 3 4 5 DNK
The products’ quality
The products’ user-friendliness
Selection of products
Price
The staff’s attire
Availability of the staff
Technical support
Education provided about products The way the entire staff treats customers The way sellers treat customers The way technicians treat customers The way the finance department treats customers Time from order to delivery Time from offer request to offer
Handling of invoices
Complaint policy
What is your general grade to IT©?
A
PPENDIX
II:
R
ESULTS
Question 1
Which products does the company you represent purchase? (Please choose one alternative)
IT solutions 9,05%
Copying machines 69,40%
IT solutions and copying machines 21,55%
Question 2
In your relationship with IT©, how would you like to describe your role? (Please choose one alternative)
Purchaser of product/service 5,58%
User of product/service 45,92%
Purchaser & user of product/service 48,50%
Question 3
Which factors do you regard as being most important when choosing a provider of copying machines and IT solutions?
Please rank the following categories from 1 to 10 (1 = most important, 10 = least important)
1 2 3 4 5 6 7 8 9 10
Final ranking The products' quality 32,52% 19,33% 10,00% 5,93% 3,33% 2,52% 1,69% 3,42% 5,00% 13,56% 1
The products'
user-friendliness 21,14% 18,49% 14,17% 11,86% 2,50% 6,72% 4,24% 4,27% 9,17% 4,24% 2 Selection of products 5,69% 3,36% 6,67% 3,39% 7,50% 12,61% 11,02% 15,38% 12,50% 21,19% 3
Price 4,07% 14,29% 12,50% 16,10% 12,50% 10,08% 13,56% 9,40% 5,83% 1,69% 4
Availability of the staff 4,07% 7,56% 14,17% 12,71% 20,00% 14,29% 12,71% 11,11% 2,50% 1,69% 5
Technical support 13,01% 13,45% 17,50% 17,80% 10,00% 11,76% 5,08% 5,98% 3,33% 1,69% 6
Education about
products 3,25% 10,08% 5,00% 6,78% 9,17% 10,08% 17,80% 14,53% 18,33% 5,08% 7 The way the staff treats
customers 2,44% 5,88% 10,83% 8,47% 18,33% 21,85% 13,56% 12,82% 5,83% 1,69% 8 Delivery times 3,25% 5,88% 4,17% 14,41% 10,00% 7,56% 12,71% 13,68% 22,50% 7,63% 9
Question 4
Of which importance do you regard the following factors when choosing a provider of copying machines and IT-solutions?
1: Not at all important 2: Not important
3: Neither important nor not important 4: Important
5: Very important DNK: Do not know
1 2 3 4 5 DNK
The products' quality 0,67% 0,67% 2,67% 28,67% 65,33% 2,00%
The products user-friendliness 0,66% 0,00% 4,64% 32,45% 60,26% 1,99% Selection of products 3,45% 10,34% 37,24% 40,00% 5,52% 3,45%
Price 0,68% 2,72% 12,93% 46,94% 33,33% 3,40%
Availability of the staff 0,66% 0,66% 7,28% 50,99% 39,07% 1,32%
Technical support 0,67% 0,00% 1,34% 23,49% 71,81% 2,68%
Education about products 1,97% 6,58% 24,34% 50,00% 13,82% 3,29% The way the entire staff treats
customers 0,67% 1,33% 9,33% 49,33% 36,67% 2,67%
The way sellers treat customers 1,97% 0,66% 9,21% 50,66% 34,87% 2,63% The way technicians treat
customers 0,66% 0,00% 3,97% 46,36% 47,02% 1,99%
The way the finance department
treats customers 1,32% 1,97% 26,32% 46,71% 17,11% 6,58%
Time from order to delivery 0,66% 4,64% 15,89% 52,32% 22,52% 3,97% Time from offer request to offer 1,32% 5,92% 26,32% 49,34% 12,50% 4,61%
Handling of invoices 1,99% 8,61% 31,79% 40,40% 11,26% 5,96%
Question 5
How well does IT©’s performance correspond to your expectations?
A number of statements are presented below. Please check the box which matches your views most closely. 1: Completely disagree 2: Disagree 3: Neutral 4: Agree 5: Completely agree DKN: Do not know 1 2 3 4 5 DNK
The products’ quality 0,68% 7,53% 19,18% 54,11% 12,33% 6,16% The products’ user-friendliness 1,37% 5,48% 23,29% 56,85% 6,16% 6,85% Selection of products 0,68% 4,11% 22,60% 47,95% 8,22% 16,44%
Price 0,68% 4,79% 39,04% 29,45% 4,79% 21,23%
Availability of staff 0,00% 6,85% 14,38% 47,95% 25,34% 5,48%
Technical support 1,38% 5,52% 15,86% 47,59% 21,38% 8,28%
Education about products 0,69% 6,21% 24,14% 37,93% 8,97% 22,07% The way the entire staff treat
customers 0,69% 2,78% 15,97% 37,50% 35,42% 7,64%
The way sellers treat customers 1,39% 4,17% 14,58% 36,81% 30,56% 12,50% The way technicians treat
customers 0,69% 2,07% 11,72% 41,38% 33,79% 10,34%
The way the finance department
treat customers 1,39% 1,39% 28,47% 25,00% 10,42% 33,33%
Time from order to delivery 1,39% 4,17% 25,00% 33,33% 15,28% 20,83% Time from offer request to offer 0,69% 1,39% 25,00% 30,56% 12,50% 29,86% Handling of invoices 2,76% 2,07% 34,48% 26,21% 9,66% 24,83%
Complaint policy 0,69% 0,69% 33,33% 19,44% 6,25% 39,58%
Overall, IT© has fulfilled my
Question 6
Which grade do you want to give IT© in the following categories? 1: Very bad 2: Bad 3: Pass 4: Good 5: Very good DNK: Do not know 1 2 3 4 5 DNK
The products' quality 0,71% 4,26% 19,86% 51,06% 17,73% 6,38% The products' user-friendliness 1,42% 4,96% 20,57% 55,32% 10,64% 7,09% Selection of products 0,71% 0,71% 21,43% 39,29% 7,14% 30,71%
Price 0,70% 4,23% 36,62% 28,17% 2,82% 27,46%
Availability of the staff 0,69% 2,78% 20,83% 45,14% 22,92% 7,64%
Technical support 0,70% 2,80% 17,48% 41,26% 28,67% 9,09%
Education about products 0,70% 4,93% 23,24% 31,69% 11,27% 28,17% The way the entire staff treats
customers 0,69% 0,69% 18,06% 38,89% 32,64% 9,03%
The way the sellers treat customers 1,39% 2,08% 14,58% 37,50% 31,25% 13,19% The way the technicians treat
customers 0,71% 0,71% 12,06% 36,88% 40,43% 9,22%
The way the finance department
treats customers 1,39% 1,39% 17,36% 22,92% 15,28% 41,67%
Time from order to delivery 0,69% 3,47% 25,00% 28,47% 15,97% 26,39% Time from offer request to offer 0,69% 0,00% 18,06% 29,17% 13,89% 38,19%
Handling of invoices 2,78% 1,39% 23,61% 30,56% 6,25% 35,42%
Complaint policy 1,39% 1,39% 15,97% 21,53% 3,47% 56,25%
What is your general grade to
A
PPENDIX
III:
H
YPOTHESIS
T
ESTING
FOR
C
ORRELATION
B
ETWEEN
H
OW
E
XPECTATIONS
W
ERE
M
ET AND
G
RADES
The sample correlation between how expectations were met and grades was 0.8567842. The sample size consists of the pairs of different parts of an offer and the company’s overall performance; 16. The aim is to determine if the population correlation, ρ, between these measures is different from 0. Thus, the test is formulated:
H0 : ρ = 0
Against H1 : ρ > 0
Using the sample information: n = 16 r = 0.8567842 α = 0.5 %
The decision rule is to reject H0 if:
(r √(n-2)) / (√(1-r2)) > tn – 2,α
Test:
t = (r √(n-2)) / (√(1-r2)) = (0.8567842 √(14)) / (√(1-0.85678422)) = 6.216691042 6.216691042 > t14, 0,005 = 2.977
Conclusion:
The null hypothesis is rejected at the 0.5 % significance level. The result suggests that there is a positive liner relationship between how the respondents’ expectations were met and the grades they gave.
