Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments

Through qualitative and empirical research, the authors find that the service quality construct conforms to the structure of a third-order factor model that ties service quality perceptions to distinct and actionable dimensions: outcome, interaction, and environmental quality. In turn, each has three subdimensions that define the basis of service quality perceptions. The authors further suggest that for each of these subdimensions to contribute to improved service quality perceptions, the quality received by consumers must be perceived to be reliable, responsive, and empathetic. The authors test and support this conceptualization across four service industries. They consider the research and managerial implications of the study and its limitations.

https://www.jstor.org/stable/pdf/3203465.pdf

Some New Thoughts on Conceptualizing Perceived Service Quality: A Hierarchical Approach:

Understanding customer experience and the customer journey over time is critical for firms. Customers now interact with firms through myriad touch points in multiple channels and media, and customer experiences are more social in nature. These changes require firms to integrate multiple business functions, and even external partners, in creating and delivering positive customer experiences. In this article, the authors aim to develop a stronger understanding of customer experience and the customer journey in this era of increasingly complex customer behavior. To achieve this goal, they examine existing definitions and conceptualizations of customer experience as a construct and provide a historical perspective of the roots of customer experience within marketing. Next, they attempt to bring together what is currently known about customer experience, customer journeys, and customer experience management. Finally, they identify critical areas for future research on this important topic.

/pdf/understanding-customer-experience-throughout-the-customer-52i6qreyzk.pdf

Understanding Customer Experience Throughout the Customer Journey

https://www.rug.nl/staff/p.c.verhoef/jr_customer_experience.pdf

Customer Experience Creation: Determinants, Dynamics and Management Strategies

This article develops and discusses the concept of customer engagement behaviors (CEB), which we define as the customers’ behavioral manifestation toward a brand or firm, beyond purchase, resulting from motivational drivers. CEBs include a vast array of behaviors including word-of-mouth (WOM) activity, recommendations, helping other customers, blogging, writing reviews, and even engaging in legal action. The authors develop a conceptual model of the antecedents and consequences—customer, firm, and societal—of CEBs. The authors suggest that firms can manage CEBs by taking a more integrative and comprehensive approach that acknowledges their evolution and impact over time.

Customer engagement behavior : Theoretical foundations and research directions

Many service organizations have embraced relationship marketing with its focus on maximizing customer lifetime value. Recently, there has been considerable controversy about whether there is a link between customer satisfaction and retention. This research question is important to researchers who are attempting to understand how customers' assessments of services influence their subsequent behavior. However, it is equally vital to managers who require a better understanding of the relationship between satisfaction and the duration of the provider-customer relationship to identify specific actions that can increase retention and profitability in the long run. Since there is very little empirical evidence regarding this research question, this study develops and estimates a dynamic model of the duration of provider-customer relationship that focuses on the role of customer satisfaction.

This article models the duration of the customer's relationship with an organization that delivers a continuously provided service, such as utilities, financial services, and telecommunications. In the model, the duration of the provider-customer relationship is postulated to depend on the customer's subjective expected value of the relationship, which he/she updates according to an anchoring and adjustment process. It is hypothesized that cumulative satisfaction serves as an anchor that is updated with new information obtained during service experiences. The model is estimated as a left-truncated, proportional hazards regression with cross-sectional and time series data describing cellular customers perceptions and behavior over a 22-month period.

The results indicate that customer satisfaction ratings elicited prior to any decision to cancel or stay loyal to the provider are positively related to the duration of the relationship. The strength of the relationship between duration times and satisfaction levels depends on the length of customers' prior experience with the organization. Customers who have many months' experience with the organization weigh prior cumulative satisfaction more heavily and new information relatively less heavily. The duration of the service provider-customer relationship also depends on whether customers experienced service transactions or failures. The effects of perceived losses arising from transactions or service failures on duration times are directly weighed by prior satisfaction, creating contrast and assimilation effects.

How can service organizations develop longer relationships with customers? Since customers weigh prior cumulative satisfaction heavily, organizations should focus on customers in the early stages of the relationship-if customers' experiences are not satisfactory, the relationship is likely to be very short. There is considerable heterogeneity across customers because some customers have a higher utility for the service than others. However, certain types of service encounters are potential relationship "landmines" because customers are highly sensitive to the costs/losses arising from interactions with service organizations and insensitive to the benefits/gains. Thus, incidence and quality of service encounters can be early indicators of whether an organization's relationship with a customer is flourishing or in jeopardy. Unfortunately, organizations with good prior service levels will suffer more when customers perceive that they have suffered a loss arising from a service encounter-due to the existence of contrast effects. However, experienced customers are less sensitive to such losses because they tend to weigh prior satisfaction levels heavily.

By modeling the duration of the provider-customer relationship, it is possible to predict the revenue impact of service improvements in the same manner as other resource allocation decisions. The calculations in this article show that changes in customer satisfaction can have important financial implications for the organization because lifetime revenues from an individual customer depend on the duration of his/her relationship, as well as the dollar amount of his/her purchases across billing cycles.

Satisfaction levels explain a substantial portion of explained variance in the durations of service provider-customer relationships across customers, comparable to the effect of price. Consequently, it is a popular misconception that organizations that focus on customer satisfaction are failing to manage customer retention. Rather, this article suggests that service organizations should be proactive and learn from customers before they defect by understanding their current satisfaction levels. Managers and researchers may have underestimated the importance of the link between customer satisfaction and retention because the relationship between satisfaction and duration times is very complex and difficult to detect without advanced statistical techniques.

http://www.ruthnbolton.com/Publications/RelationshipDurationandSatisfaction.pdf

A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction

This paper develops a new model for studying requirements planning in multistage production-inventory systems. We first characterize how most industrial planning systems work, and we then develop a mathematical model to capture some of the key dynamics in the planning process. Our approach is to use a model for a single production stage as a building block for modeling a network of stages. We show how to analyze the single-stage model to determine the production smoothness and stability for a production stage and the inventory requirements. We also show how to optimize the tradeoff between production capacity and inventory for a single stage. We then can model the multistage supply chain using the single stage as a building block. We illustrate the multistage model with an industrial application, and we conclude with some thoughts on a research agenda.

/pdf/a-dynamic-model-for-requirements-planning-with-application-5d2cy2oyjm.pdf

A Dynamic Model for Requirements Planning with Application to Supply Chain Optimization

Modeling involves a series of stages, from the initial concept or abstraction to potential use in industry, or some form of colleague or student exposure - a variety of processes and users. Modeling also implies a number of modeling paradigms - from optimization to simulations. A modeling environment supports the modeling life cycle and "general" modeling, not just one technique such as linear programming. We describe an information systems approach to the design of an integrated modeling environment - OMAC. The design requirements, system's architecture, and modeling capability of the OMAC modeling environment are discussed.

David B. Kletter

Papers

A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction

A Dynamic Model for Requirements Planning with Application to Supply Chain Optimization

OMAC: An environment for modeling and analysis