Magazine article Journal of Services Research

Customer Complaint Behavior and Satisfaction in a B2B Context: A Longitudinal Analysis

Magazine article Journal of Services Research

Customer Complaint Behavior and Satisfaction in a B2B Context: A Longitudinal Analysis

Article excerpt

INTRODUCTION

Research has identified an assortment of positive benefits related to high levels of customer satisfaction. These benefits consist of re peat business, lower price elasticity, positive word of mouth, and more cross selling (Fornell et al. 1996). If the customers are highly satisfied, they have a tendency to spend more with their existing supplier (Bolton et al. 2000; Reichheld, 1996; Reichheld and Sasser, 1990). High satisfaction can also lead to an increase in share of wallet (Cooil et al., 2007). Some researchers found a positive relationship between customer satisfaction and cash flow (Gruca and Rego, 2005; Srivastava et al., 1998) and with economic value added (Eklöf et al. 1999). Furthermore, some researchers (Fornell et al., 2006; Anderson, 2004) have found that customer satisfaction and stock price are positively related. There are many well documented positive outcomes resulting from high levels of customer satisfaction.

With regard to customer complaints, Fornell et al. (1996) discovered a negative correlation between customer satisfaction scores and customer complaints. In other words, higher customer satisfaction levels lead to a decreased number of customer complaints while at the same time improving customer loyalty (Fornell and Wernerfeldt, 1987; Johnson et al. 2001). If a company is able to reduce the incidence of customer complaints successfully, this should improve customer loyalty (Fornell, 1992; Tax et al. 1998). Complaint feedback from customers can also be used for the development and improvement of products and services (Söderlund, 1998, Slater and Narver, 1995; Hart et al.,1990).

However, the specific relationship between customer satisfaction and customer complaints is an under researched area. For example, is the relationship between satisfaction levels and the frequency of complaints a simple negative, linear relationship across all satisfaction levels? Or is the relationship asymptotic, changing at different satisfaction levels? These questions have not been answered in the existing research.

To investigate these issues, a longitudinal research study was conducted to examine the relationship between customer satisfaction and complaints in B2B services. The study was conducted by examining nineteen quarters of customer satisfaction data gathered between 1999 and 2004 and the incidence of customer complaints within the same time period. Before discussing the research study in more detail, it is necessary to review the literature on customer satisfaction and customer complaint management.

THEORETICAL BACKGROUND

Causes of complaints

The causes for customer complaints in general are widespread and quite common. In about 20% of purchases, customers indicate dissatisfaction of some sort (Andreasen and Best, 1977). Day and Ash (1979) reported in their study regarding durable products that the most frequently quoted reason to complain was the inferior quality of the materials. Other reasons, though much less frequently quoted, were the inferior quality of workmanship, product drawbacks not told to the customer at the time of purchase, the cost of using the product and damaged product when delivered. Thus complaints can be related to product performance and other aspects of the purchase and use process (Day and Laird, 1977). Another important finding in the study was that the reasons to complain varied depending upon the type of product.

Services are more prone to complaints than tangible products. Gariner (2003) reported that 45% of the consumers had a problem with purchases in the past year. Most of the problems were service related, which is probably due to the unique characteristics of services. These unique characteristics include intangibility, heterogeneity, perishability and inseparability of production and consumption (Rushton and Carson, 1985). The "Intangibility" characteristic has been claimed to be the single most important characteristic differentiating physical products and services (Zeithaml and Bitner, 1996) and thus, has an important effect on the marketing of services (Lovelock, 1991; Rushton and Carson, 1989). …

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