Segment differences in the asymmetric effects of service quality on business customer relationships

Abstract

Purpose

The purpose of this article is to explore the possible negative asymmetric effects in the impact of service quality on the satisfaction and retention of different customer segments in a professional business services context. Negative asymmetry means that a lower than average service quality evaluation has a stronger effect on customer satisfaction and retention than a higher than average evaluation.

Design/methodology/approach

The article provides a survey of 124 business customers of a Midwestern radio advertising services provider, preceded by nine in‐depth interviews with account reps of the advertising firm and two focus groups with business customers.

Findings

Along the service quality dimensions – customer satisfaction – retention chain, there are significant negative asymmetric effects and the mediating role of satisfaction varies widely. There are important differences across customer groups: service outcomes are most important determinants of customer satisfaction for large and relatively newer accounts; functional quality dimensions (empathy) are most important factors for small and relatively mature accounts.

Research limitations/implications

Surveying customers of one organization in one industry reduces the generalizability of the findings. The study employed only two segmentation variables, while many other variables could be investigated. The focus is on the asymmetric effects of service quality; other factors, such as costs, were not considered.

Practical implications

Managers should invest resources in improving low performance in the service quality dimensions with strongest impact on customer satisfaction and highest negative asymmetry. The identified segment differences suggest the need to achieve strong results for large accounts and relatively new accounts. The customer relationship is most important for small accounts and relatively mature accounts. Maintaining service reliability is critical for small and new account retention.

Originality/value

This study is a first effort to explore the differences in effects across service quality dimensions and customer segments in a professional business service context. The findings indicate that aggregating customers and the service quality measurement can offer misleading information to managers.

Citation

Stan, S., Evans, K.R., Wood, C.M. and Stinson, J.L. (2007), "Segment differences in the asymmetric effects of service quality on business customer relationships", Journal of Services Marketing, Vol. 21 No. 5, pp. 358-369. https://doi.org/10.1108/08876040710773660