RESEARCH SYNTHESIS

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

relationships Simona Stan

University of Montana, Missoula, Montana, USA

Kenneth R. Evans University of Oklahoma, Norman, Oklahoma, USA

Charles M. Wood University of Tulsa, Tulsa, Oklahoma, USA, and

Jeffrey L. Stinson North Dakota State University, Fargo, North Dakota, USA

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.

Keywords Customer services quality, Business-to-business marketing

Paper type Research paper

An executive summary for managers and executive

readers can be found at the end of this issue.

The management of customer satisfaction and its

determinants, attribute-level performance, and outcomes,

customer retention and firm profitability, has become a

strategic imperative for most firms, especially in services (e.g.

Anderson and Mittal, 2000; Bolton, 1998; Mittal et al., 1998;

Rust and Oliver, 1994). Only recently has the literature

investigated the exact nature of the links between attribute- level performance and consumers’ overall satisfaction and repurchase intentions (e.g. Kumar, 2002; Mittal et al., 1999; Mittal et al., 1998; White and Schneider, 2000). These studies have identified significant asymmetric effects that the literature has largely ignored. Asymmetric effect means that a lower than average attribute performance evaluation has a stronger or weaker effect on customer satisfaction and retention than a higher than average evaluation. Still, in spite of the call to replace the “first-generation” view of the satisfaction-profit chain as linear and symmetric with a “second-generation” perspective that recognizes the greater complexities in these links (Zeithaml, 2000), the extant literature has shortcomings in at least three areas. First, there is a need for a more theoretical approach to the

development of a typology addressing why the magnitude and direction of asymmetry is different for different product

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0887-6045.htm

Journal of Services Marketing

21/5 (2007) 358–369

q Emerald Group Publishing Limited [ISSN 0887-6045]

[DOI 10.1108/08876040710773660]

358Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

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attributes (Mittal et al., 1998). The literature documents situations in which gains on an attribute outweigh losses, leading to a positive asymmetry. Such attributes are called

motivating, satisfaction enhancing, or utility enhancing attributes. For example, if customers see an improvement in

the visual aspect of packaging, their overall satisfaction with the product increases significantly; however a drop in the

visual aspect of packaging would have little impact on their overall satisfaction. In contrast, if losses outweigh gains there is a negative asymmetry, and the respective attribute is called

a hygiene, satisfaction preserving, or utility preserving attribute (e.g. Herzberg, 1968; Mittal et al., 1998; Sirdeshmukh et al., 2002). A typical example is that a drop in reliability lowers a customer’s satisfaction with a service

provider significantly; however, an equivalent increase in service reliability would have little impact on customer’s satisfaction. Further, while attribute performance is theorized

to impact overall satisfaction, which in turn determines customer retention, it has been noted that the mediating

effect of satisfaction differs across attributes (Mittal et al., 1998). This issue is important because if firms improve

performance on relatively strong drivers of overall satisfaction but not repurchase intent, then they may observe a flattening

of the satisfaction-intent relationship (Kumar, 2002). Second, while most studies aggregate customers, it is

imperative to consider customer segments separately. Unobserved heterogeneity is a problem in interpreting results because aggregation may create effects that do not

exist in any segment or may wash out effects that do exist (Rust et al., 1995). Failure to consider segment-specific differences in the investigation of the strength and asymmetry of the different attributes’ effects on customer satisfaction and

retention may lead a firm to optimize performance on the wrong attribute for a given segment (Anderson and Mittal, 2000). While Rust et al. (1995) advise managers to “consider each segment individually,” the academic research offers very little theoretical insight into why there could be systematic

differences in the nature and strength of attribute effects across certain segments. Third, while most studies of attribute performance consider

at least some service aspects in the product offering, the

context of investigation is predominantly consumer goods and services, while the business-to-business (B2B) service sector is largely ignored. A particularly important but neglected area is

professional business services (Lapierre et al., 1999). Professional B2B service providers (e.g. management

consulting, advertising, legal, information technology, financial planning) typically conduct larger transactions with

fewer customers than B2C services. These services are often knowledge-intensive, technically complex and sophisticated,

and their performance is intrinsically difficult for clients to evaluate (Patterson et al., 1997). In professional services, the provider acts as an agent for customers who are typically less

knowledgeable and therefore, more dependent upon the provider than in other contexts (Mills, 1990; Sharma, 1997). In an effort to help address these gaps in the literature, this

paper explores segment differences in the asymmetric effects

of service quality on the overall satisfaction and relationship continuance intentions of business customers who buy

advertising services. The following section details the theoretical foundation for the study, followed by a series of hypotheses pertaining to differences between customer

segments based on account size and length of relationship

with the service provider. Further, the paper reports the

results of an exploratory study on the business customers of a Midwestern radio advertising services provider. The paper

concludes with a series of theoretical and managerial implications.

Theoretical background

Asymmetric effects in customer relationship

maintenance

Customers have a variety of voluntary and involuntary reasons

to maintain relationships with service providers (e.g. Bendapudi and Berry, 1997). It is widely accepted that

customer satisfaction is a major determinant of customer loyalty or retention. Consistent with other studies on the consumption system (e.g. Mittal et al., 1999), this paper will investigate the effects of attribute-level performance, here represented by the different service quality dimensions, on

customers’ overall satisfaction and relationship continuance intentions (i.e. customers’ repurchase intent and expectations that the relationship will be long-term; Kumar et al., 1995). While most research in services assumes linear relationships

and symmetric effects of positive and negative service

evaluations, some nonlinear effects of service quality have been identified. For example, Zeithaml et al. (1996) found a flatter response function below the tolerance zone than within and above it; Rust et al. (1995) found a non-linear impact of satisfaction level on repeat purchase; and White and

Schneider (2000) found that different service quality dimensions impact the low end and the high end of

customer commitment to a service provider. These findings, in the services literature, are consistent with findings in the more general product consumption literature, in which recent

studies propose asymmetric effects of positive and negative evaluations of attribute-based performance on overall

satisfaction and behavioral intentions (e.g. Mittal et al., 1998; Mittal et al., 1999; Sirdeshmukh et al., 2002). Asymmetric effects are conceptualized as: one unit of

negative performance in a product attribute or service dimension will have a different (greater or smaller) effect on

overall satisfaction or repurchase intentions than a corresponding unit of positive performance. This research

has primarily argued and found support for negative asymmetric effects. This means that a negative evaluation has a stronger effect on customer satisfaction than a positive

evaluation of the same magnitude. For example, on a scale from 1 to 7, if service reliability drops from 4 to 3, the impact

on customer satisfaction is larger than if the reliability rating increases from 4 to 5. There are two main theoretical bases for the presence of negativity effects in customer satisfaction. The

first is prospect theory, which states that losses loom larger than gains (Kahneman and Tversky, 1979). Psychologically, a

one-unit loss is weighted more than an equal amount of gain. In the context of customer retention, negative outcomes on

attribute performance should have more impact on satisfaction than equivalent positive outcomes. The second theoretical base consists of the distinctive coding of negative

versus positive events in memory (Wyer and Gordon, 1982). Customers’ overall evaluations vary on the basis of the

accessibility to these events. Negative information is more perceptually salient and elicits a stronger response than positive information (Peeters and Czapinski, 1990).

Therefore, with regard to customer satisfaction, information

Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

359Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

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on service attributes/experiences with negative performance

should have a greater impact on the cumulative satisfaction judgment. A few studies that investigated asymmetric effects of

attribute performance found some positivity effects – i.e. a

stronger effect of a positive evaluation than of a negative evaluation of the same magnitude. For example Mittal et al. (1998) found a negativity effect on customers’ satisfaction with cars for customers’ evaluation of transmission and brakes

but a positivity effect for interior roominess. Sirdeshmukh et al. (2002) proposed that asymmetric effects are contingent upon the nature of the attribute or dimension evaluated. Negative performance on hygiene (or utility preserving)

factors has a stronger effect on satisfaction than positive

performance (the negativity effect). However, for motivators (or utility-enhancing factors), a stronger effect occurs for

positive performance than negative performance (the positivity effect). In general, empirical findings suggest that

hygiene factors tend to be more instrumental in nature (attributes that deliver core functional benefits such as

reliability) while motivators tend to be more expressive (attributes that deliver psychological benefits such as visual

delight) (e.g. Johnston, 1995; Mittal et al., 1998). However, while consumers make purchases for both functional and

emotional reasons, business customers are much more inclined to view the purchase of products and services as a

means to achieve rational goals. Therefore, when businesses buy professional services, it is likely that the vast majority of

the attributes of an exchange serve functional purposes (Lapierre, 1997). As a result, in this context, any asymmetric

effects would be of a negative nature. It is expected that the different quality dimensions will have different effects on

customer relationship maintenance and that some of these effects will display diminishing returns for increased quality.

Service quality dimensions

While there is general consensus that service quality is a multi-dimensional construct, empirical studies continue to

conceptualize and identify different dimensional structures for service quality in different contexts (see Brady and Cronin,

2001). The most widely used multi-dimensional model, especially in consumer markets, is SERVQUAL, which

conceptualizes service quality as having five dimensions (Parasuraman et al., 1988). Alternatively, the model proposed by Gronroos (1984) conceptualizes service quality along two global dimensions: technical (i.e. service product, primarily

determined by technical procedures) and functional (i.e. service delivery process, primarily influenced by the

interpersonal interaction). More recently, multilevel models combine the two approaches and identify the service product

and the service delivery process as primary dimensions of service quality (Rust and Oliver, 1994), which are made up of

different subdimensions (Brady and Cronin, 2001). Organizations purchase services for the utility or value

created by the service outcome. For example, businesses buy advertising services hoping that the service outcome will

result in sales growth or increased brand awareness. In an analysis of the meaning of value in professional B2B services,

Lapierre (1997) identifies “value-in-use” as the organizational customer’s outcomes from the service, such as better financial

performance or improved strategic decisions. However, the process of service delivery is important as well, because

“value-in-exchange” is derived from the technical quality of

the service provider’s procedures (e.g. schedule reliability,

technical expertise) and from non-technical aspects of the service delivery, such as service employees’ responsiveness, trustworthiness, and relationalism (Lapierre, 1997). In a

similar manner, Szmigin (1993) proposes a B2B service quality model consisting of three primary dimensions: service outcome, technical quality of service procedures (“hard” features) and the functional quality of human interactions

(“soft” features). Accordingly, we propose a model of service quality consisting of three primary dimensions: service outcome (results for the client’s business), technical quality

(e.g. reliability of technical service delivery) and functional quality (e.g. rep’s responsiveness, empathy and assurance).

Segment differences in the asymmetric effects of service quality

Customers with different characteristics place varying levels of

importance on attribute-level performance because they have different needs, previous experience with the service or the service provider, and/or tolerance levels. A number of

empirical studies have investigated segment differences in services (e.g. Pitt et al., 1996; Rangan et al., 1992; van der Walt et al., 1994). While desired service benefits and service expectations are obviously important among the large number

of potential segmentation variables, managerial practice notes that it is often more useful to segment the market on easily observable characteristics, which are highly associated with

differences in needs and behaviors. Two such variables are account size and relationship length.

Account size

From the provider’s perspective, account size is an important classification variable because larger clients generate more revenues. However, there are also likely to be systematic differences in the service needs and expectations of large and

small accounts, which would lead them to place different weights on the service dimensions. An important theoretical rationale for the differences

between small and large accounts’ relationships with a professional service provider is due to the balance/imbalance of power. The situations in which service organizations are

hired by businesses to perform specified technical tasks can be viewed as principal-agent exchanges (Mills, 1990). Such professional service exchanges pose special agency problems

of vulnerability and control for the principal, i.e. the service client, because the classical problems created by information asymmetry are compounded by knowledge asymmetry (Sharma, 1997). As noted by Sharma, less knowledgeable

clients have difficulty either monitoring the provider’s behavior, or evaluating the service outcome. However, the professional agents are less likely to behave

opportunistically if the clients have alternative access to the relevant knowledge base (e.g. a firm might employ a media/ advertising manager who coordinates the work of advertising

agencies) (Sharma, 1997). Large firms are more likely to have access to such knowledge, either by having internalized knowledge (specialized staff), or by working with multiple

advertising agencies. Therefore, as compared to small accounts, large accounts may not only be better able to evaluate the exact nature of the service outcome, but they are

also less vulnerable to the service provider’s behavior during the service delivery process.

Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

360Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

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Limited evidence provided by the few empirical studies that have investigated segment differences in services tend to support this argument. For example, de Bretani (1995) found that small firms tend to have a longer-term and more responsive company-client relationship and the company executives tend to have a more intimate understanding of business partners. Rangan et al. (1992) found four purchase- behavior based segments which were highly related to account size: small accounts tend to be relationship buyers and value the partnership with the suppliers more than price or service concessions; in contrast, large accounts tend to be more transactional/bargain hunters and put pressure on getting both low price and service concessions. In conclusion, it is expected that the service outcome would

be a more salient, utility preserving factor for large accounts (i.e. large customers are particularly sensitive to losses in service results). In contrast, the technical and functional quality of the service provision process are likely to be more salient, utility preserving factors for small accounts. This means that the respective service quality dimensions have a stronger positive effect on customers’ satisfaction and relationship continuance intentions than the other dimensions. In addition, these effects are likely to display negative asymmetries (i.e. a loss on the respective dimension would loom larger than a gain). Finally, as argued before, while it is expected that the effect of service quality evaluations on relationship continuance intentions is at least partially mediated by overall satisfaction, neither the theory nor the previous findings provide any indication as to the relative degree of mediation across the different service quality dimensions. Therefore, the issue of mediation remains to be explored empirically. In summary: H1. For large accounts, service outcome will have a

stronger positive impact, with a stronger negative asymmetry, on customer satisfaction and relationship continuance intentions, than for small accounts.

H2. For small accounts, technical quality will have a stronger positive impact, with a stronger negative asymmetry, on customer satisfaction and relationship continuance intentions, than for large accounts.

H3. For small accounts, functional quality will have a stronger positive impact, with a stronger negative asymmetry, on customer satisfaction and relationship continuance intentions, than for large accounts.

Duration of account relationship

Another practical segmentation variable for service providers, which is extensively used by managers, is the duration of the relationship with the account. As it is well known, firms often offer different deals and treatment to older accounts as compared to new accounts. However, it is less clear how the needs of short-term versus long-term customers differ. More recent literature has suggested that relationships between attribute-level performance, satisfaction, and behavioral intentions are not static. As the consumption of the products and services unfolds, attribute salience, and therefore weights in determining overall satisfaction, shift over time (Anderson and Mittal, 2000; Gounaris and Venetis, 2002; Mittal and Katrichis, 2000; Mittal et al., 1999). Still, it is unclear how and why the weights and asymmetric effects of the different service quality dimensions differ between customers with relatively new versus more mature service provider relationships.

There are several theoretical reasons why attribute salience

varies over time. From an agency perspective, it is argued that repeat contact and investment in assets specific to the

exchange, which is likely to happen in longer-term relationships, increases the amount of information that the

principal has about the agent and decreases the agent’s likelihood to behave opportunistically (Sharma, 1997). From

a relationship cycle perspective (e.g. Wilson, 1995) it is argued that relationship related constructs have an active phase where they are the center of the relationship

development process and a latent phase where they are still important but not under active consideration. In general, as

time passes and issues are negotiated and resolved, attributes tend to migrate from satisfaction enhancement to satisfaction

maintenance (i.e. negative asymmetry; Mittal et al., 1999). It is easier to surprise negatively a customer with a drop in performance than to surprise positively a customer with an

improvement in performance. These theoretical premises indicate that in the context of

professional B2B services, providers’ performance along the dimensions of service outcome and technical quality of the

service delivery process are likely to be more salient and more critical in the case of recently opened accounts. Indeed, the

main reason to approach an advertising agency is to achieve results for the firm (e.g. consumer exposure, traffic, revenues).

Further, in the beginning of a B2B relationship it is necessary to negotiate the policies and procedures of service delivery (e.g. scheduling and billing) which represent technical quality. As

customers have increased interactions with reps, they expect higher levels of functional quality (e.g. rep’s empathy,

individualized attention, customized interaction), it is likely that this service quality dimension becomes a utility

maintenance attribute (see Mittal et al., 1999). The idiosyncratic findings reported in the literature, to

date, provide an incomplete and often contradictory picture of the time differences in the attribute-level performance and overall satisfaction link. Still, some findings provide support

for the theory advanced here. For example, Mittal et al. (1999) found that, as customers’ relationship with a mutual

fund company matures, trust and confidence (equivalent with functional quality here) become satisfaction maintenance

attributes. They also found that for car buyers, as time passed, the weight of the functional service quality (honesty) went up, while the weight for the technical quality (wait before write-

up; vehicle ready when promised) went down. In conclusion, it is expected that the service outcome and

the technical quality of the service provision process are more salient, utility preserving factors for the newer accounts, while

the functional quality of the service provision process is likely to be a more salient, utility preserving factor for mature

accounts. As in the case of account size, it is expected that overall satisfaction will at least partially mediate the effects of

the service quality dimensions on relationship continuance intentions, but it is impossible to hypothesize a priori to what degree this mediation might differ across dimensions. Hence,

in formal terms it is hypothesized that: H4. For relatively newer accounts, service outcome will

have a stronger positive impact, with a stronger negative asymmetry, on customer satisfaction and

relationship continuance intentions, than for mature accounts.

H5. For relatively newer accounts, technical quality will have a stronger positive impact, with a stronger

Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

361Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

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negative asymmetry, on customer satisfaction and

relationship continuance intentions, than for mature

accounts.

H6. For mature accounts, functional quality will have a stronger positive impact, with a stronger negative

asymmetry, on customer satisfaction and relationship

continuance intentions, than for relatively newer

accounts.

Methodology

The advertising industry was selected as the context for this

study as it is uniquely suited for studying professional

business services because, due to the specialized knowledge

requirements, such as creative or media management, most

organizations hire professional advertising firms to fulfill at

least part of their advertising needs. In addition, advertising

requires a significant amount of interaction with the client and

service customization, which is conducive to service provider

– client relationship development (Michell, 1988). A study

was performed with the clients of a radio advertising agency in

a medium-sized, Midwest city. The agency’s management

identified 562 businesses that advertise on one or more of four

local radio stations for which the agency produces and sells

advertising. Each radio station has its own account reps,

advertising production and air personnel. Therefore, from the

client’s perspective, the radio station is the service provider. The first stage of the study consisted of qualitative research,

aimed at developing a valid multi-attribute service quality

measure for the specific context of this industry. The

qualitative research consisted of nine 30-minute interviews

with sales people (account reps) and two focus groups with

customers (with 12 small and ten large accounts respectively).

The results of the interviews and focus groups indicated that

business customers’ top priorities in advertising services are:

increased revenue or customer response (e.g. traffic) from

advertising; reaching the right demographics; good ad

production quality; and good value (ROI) of the advertising

spots. Further the clients indicated that the most desired rep

attributes are professionalism (homework done, appointments

kept); creativity; honesty (honest representation of product;

fair treatment on rates); understanding client business’ needs

(genuine interest and tailoring advertising services to the

client’s business needs); and follow-through (not over-

promising and then under-delivering). Overall, the results of

the qualitative research suggest that business clients perceive

the service outcome and the technical and functional aspects

of the service delivery as distinct dimensions. The qualitative research was used to develop a business

client survey. Questionnaires and cover letters were mailed to

key informants who were responsible for making advertising

decisions in their business. As an incentive, the agency made a

charitable donation for each returned questionnaire and

invited respondents to participate in a drawing. Three weeks

after the first mailing, a second questionnaire was mailed to

non-respondents. In total, 124 usable questionnaires were

received for a net response rate of 22 percent. The potential

for non-response bias was investigated through comparisons

of early and late responses and comparisons of the

respondents’ profiles with that of the non-responding

businesses (e.g. account size, length of relationship, volume

of advertising). No significant differences were found.

Sample profile

A profile of the 124 respondents indicated that 55 percent were owners, presidents or general managers, 20 percent were

vice presidents, managers or directors, 16 percent were marketing, sales, or advertising directors, with the remainder

holding a large variety of titles. A total of 65 percent of the respondents had a college degree and 52 percent were female.

A profile of the businesses indicated that most were retailing firms (50 percent) and non-food service firms (36 percent). A

total of 45 percent of the responding firms had annual sales over $1,000,000 and 44 percent had sales of less than

$500,000. About 37 percent of respondents allocated less than 10 percent of their advertising and promotion budget to

radio advertising, and 32 percent allocated more than 40

percent of the promotion budget to radio advertising. Some clients advertised on more than one station. Therefore,

respondents were instructed to answer the survey by focusing on the radio station to which they allocated the largest

advertising budget. The responses were almost evenly distributed across the four stations. In order to test the hypothesized differences between

customer segments, the accounts were split into groups based

on the information provided by the management of the advertising agency. Of the 124 accounts in the final sample,

53 (43 percent of the total sample) were classified by the agency as small accounts, 29 (or 23 percent) were classified as

medium accounts, and the remaining 42 (34 percent) were classified as large accounts. The medium sized accounts were

dropped from the analysis of large vs small accounts. The length of time ranged between 1 and 13 years for the 124

accounts, with a median of three years. Based on the frequency distribution and consultation with management,

the 53 accounts with a business relationship of two years or less were classified as relatively new accounts (42 percent of

the sample) and the 58 accounts with a business relationship of four years or more were classified as mature accounts (46

percent of the sample). The 13 accounts with a relationship length of three years were dropped from the analysis of newer

vs. mature accounts. A chi-square test indicated that 64 percent of the newer accounts were small while 57 percent of

the mature accounts were large. While the test suggests a significant relationship between length of time and account

size (x2 ¼ 29:05; p , 0.01), the percentages indicate that the two segmentation variables are sufficiently distinct for

practical purposes.

Measurement

Service quality was assessed with a 20-item, seven-point scale,

multi-attribute measure. The items, generated from the results of the qualitative research and compared to previous

scales (Cronin and Taylor, 1992; Parasuraman et al., 1988), attempted to capture the primary service quality dimensions

proposed in the theoretical framework: service outcome, technical quality (reliability) and functional quality

(responsiveness, assurance, and empathy). An exploratory factor analysis indicated that the 20 items load on four

factors: service outcome, reliability (technical quality), and rep assurance and empathy (two functional quality

dimensions). The CFA reported in Table I, indicated an adequate fit to the data, after dropping five items from the

initial scale due to cross-loadings and low factor loadings. All the remaining 16 items have factor loading coefficients larger

than 0.7. All four service quality dimensions demonstrated

Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

362Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

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adequate reliability (Cronbach reliability coefficients between 0.84 and 0.92 (see Table II). The service quality measure was followed by two seven-point scale measures for overall satisfaction (“overall, I am satisfied with the radio station”) and relationship continuance intentions (“I expect our relationship with the radio station to continue for a long time”). Single-item overall satisfaction and relationship continuance intentions measures are frequently used in services studies and considered particularly suitable in B2B contexts, because the cost of additional items is not compensated by the incremental information added by other items (Drolet and Morrison, 2001; Lapierre et al., 1999; Hallowell, 1996; Mittal et al., 1998).

Analysis

In order to test for asymmetric effects, a procedure described and used by Sirdeshmukh et al. (2002) was employed. Four new binary variables were created, one for each service quality dimension, representing “1” if the corresponding

standardized service quality dimension’s score was positive

and “0” if the score was negative. The four dummy variables

were multiplied with the corresponding service quality

dimensions and entered in the regressions as independent

variables. Hence, the regression for overall satisfaction is:

Satisfaction ¼ b0 þ b1SQ1 þ b2SQ2 þ b3SQ3 þ b4SQ4

þ b5SQ1D1 þ b6SQ2D2 þ b7SQ3D3

þ b8SQ4D4 þ e

in which SQ1-SQ4 are the average scores on the four service

quality dimensions and D1 to D4 are the dummy variables.

An asymmetric effect for a service quality dimension would be

indicated by a significant corresponding coefficient estimate.

For example, if the estimate for coefficient b5 is statistically

significant, then SQ1 has an asymmetric effect on satisfaction.

A negative coefficient indicates a negative asymmetry. In order to test the mediating effect of satisfaction on

relationship continuance intentions, it is necessary to verify

the following criteria (Baron and Kenny, 1986): . the independent variables (the four service quality

dimensions) must affect the mediating variable (overall

satisfaction); . the independent variables must affect the dependent

variable (relationship continuance intentions); and . when the dependent variable is regressed upon both the

independent variables and the mediator, the effects of the

independent variables are significantly lower than when

the dependent variable is regressed only upon the

independent variables.

Therefore, in order to test the hypothesized relationships,

three regressions were performed for each of the four groups

(small versus large accounts and new versus mature

accounts).

Results

A comparison of small versus large accounts’ evaluations of

the four service quality dimensions, overall satisfaction and

relationship continuance intentions, shows no significant

differences in means (all t-tests rendered non-significant results). However, the three regressions which test the

asymmetric impact of service quality on small and large

accounts, reported in Table III, indicate that the four service

quality dimensions have very different effects on customers’

satisfaction. For large accounts, the only statistically

significant driver of satisfaction is service outcome (t ¼ 6:6, p , 0.001) which has a strong negative asymmetry (t ¼ 22:8,

Table I Confirmatory factor analysis for service quality dimensions

Factor items

Factor

loadings

Service outcome (results) Station reaches wanted consumers 0.87

Station has strong, positive market visibility 0.78

Station gives good value for advertising dollar 0.74

I can repeatedly reach my target market with this station 0.85

Reliability (technical quality dimension) Station airs ads as scheduled 0.74

Station bills accurately 0.77

I receive bills in timely manner 0.83

I am able to review ad copy in advance of airing, when I wish 0.71

Rep assurance (functional quality dimension) Rep is able to assist me in evaluating effectiveness of my ads 0.94

Rep would only recommend advertising in my best interest 0.80

Rep shows me how similar companies advertise 0.81

Rep helps me develop effective ad messages 0.91

Rep empathy (functional quality dimension) Rep has good understanding of my business 0.87

Rep takes time to get to know me as a person 0.90

Rep has a good feeling for how often I want to be contacted 0.87

I feel comfortable sharing company info with my rep 0.80

Notes: Model fit: n ¼ 113, x2 ¼ 202:92; df ¼ 98; x2/df=2.07; RMSEA ¼ 0:09; Std RMR ¼ 0:07; CFI ¼ 0:91; NNFI ¼ 0:9; GFI ¼ 0:82

Table II Correlation matrix

Mean Std. dev. Cronbach coeff. alpha 1 2 3 4 5

1. Service outcome 5.33 0.97 0.87 –

2. Reliability 6.01 0.84 0.84 0.38 –

3. Assurance 5.12 1.41 0.92 0.40 0.33 –

4. Empathy 5.71 1.24 0.91 0.38 0.43 0.67 –

5. Overall satisfaction 5.69 1.14 – 0.64 0.37 0.66 0.58 –

6. Relationship cont. intentions 5.59 1.40 – 0.62 0.38 0.65 0.60 0.82

Note: all correlations coefficients are statistically significant at p , 0.01

Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

363Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

C o p yr

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2 0 0 7 . E

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Ta b le

II I

D if

fe re

n ce

s b

et w

ee n

sm al

l an

d la

rg e

ac co

u n

ts in

th e

as ym

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ic e

q u

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im en

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S m a ll a cc o u n ts

La rg e a cc o u n ts

O v e ra ll sa ti sf a ct io n

R e la ti o n sh ip

co n ti n u a n ce

in te n ti o n s

(1 )

R e la ti o n sh ip

co n ti n u a n ce

in te n ti o n s

(2 )

O v e ra ll sa ti sf a ct io n

R e la ti o n sh ip

co n ti n u a n ce

in te n ti o n s

(1 )

R e la ti o n sh ip

co n ti n u a n ce

in te n ti o n s (2 )

b t- v a lu e

b t- v a lu e

b t- v a lu e

b t- v a lu e

b t- v a lu e

b t- v a lu e

O u tc o m e

0 .0

1 0

.0 1

0 .1

8 1

.1 0

.1 7

1 .2

1 .0

3 * * *

6 .6

* * *

1 .0

0 * * *

5 .6

* * *

0 .3

3 1

.4

D p o si ti v e o u tc o m e a

0 .3

2 1

.6 0

.0 8

0 .0

4 2

0 .0

8 2

0 .5

2 0

.4 6 * * *

2 2

.8 * * *

2 0

.4 5 * *

2 2

.4 * *

2 0

.1 5

2 0

.8

R e li a b il it y

2 0

.1 4

2 0

.9 3

0 .3

6 * *

2 .6

* *

0 .4

2 * * *

3 .5

* * *

2 0

.1 2

2 0

.7 2

2 .2

5 2

1 .4

2 0

.1 7

2 1

.1

D p o si ti v e re li a b il it y

0 .2

3 1

.3 2

0 .1

2 2

0 .8

2 0

.2 4 *

2 1

.8 *

0 .0

8 0

.5 0

.1 4

0 .7

8 0

.1 0

0 .6

A ss u ra n ce

0 .5

0 * *

2 .4

* *

0 .4

7 * *

2 .5

* *

0 .2

4 1

.5 0

.1 6

0 .9

4 0

.1 6

0 .8

0 .0

6 0

.3 3

D p o si ti v e a ss u ra n ce

0 .1

6 0

.8 0

.1 1

0 .6

0 .0

3 0

.2 0

.2 0

1 .2

0 .0

8 0

.3 8

2 0

.0 6

2 0

.3

E m p a th y

0 .5

0 * * *

2 .8

* * *

0 .3

6 * *

2 .4

* *

0 .1

3 0

.9 2

0 .0

9 0

.6 1

7 0

.9 0

.1 1

0 .7

D p o si ti v e e m p a th y

2 0

.6 8 * * *

2 3

.4 * * *

2 0

.3 7 * *

2 2

.1 * *

2 0

.0 4

2 0

.3 2

0 .0

5 2

0 .3

0 .0

7 0

.4 0

.1 1

0 .7

O v e ra ll sa ti sf a ct io n

0 .4

7 * * *

4 .1

* * *

0 .6

5 * * *

3 .6

* * *

M o d e l st a ti st ic s

n ¼

5 0

n ¼

4 9

n ¼

4 9

n ¼

3 7

n ¼

3 7

n ¼

3 7

F ¼

1 0 :4

* * *

F ¼

1 4 :1

* * *

F ¼

1 9 :3

* * *

F ¼

1 4 :7

* * *

F ¼

9 :8

4 * * *

F ¼

1 3 :7

2 * * *

R 2 ¼

0 :6

6 R

2 ¼

0 :7

3 R

2 ¼

0 :8

1 R

2 ¼

0 :8

0 R

2 ¼

0 :7

3 R

2 ¼

0 :8

2

N o te s:

St at

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si g

n ifi

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t co

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ci en

ts (t

w o

-t ai

le d

te st

): * p ,

0 .1

; * * p ,

0 .0

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0 .0

1 ;

a Si

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n eg

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s

Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

364Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

C o p yr

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ll ri g h ts

r e se

rv e d .

p , 0.01). This means that large accounts are primarily

concerned with getting results from advertising. It is

noteworthy that 80 percent of the variance in their overall

satisfaction with the service provider is explained by the

service outcome. Further, the negative asymmetry means that

if large accounts experience a loss in advertising results, their

overall satisfaction will be impacted more than if they

experience a similar gain in advertising results. In other

words, achieving results is a very important utility preserving

attribute for large accounts. In addition, service outcome has

a similar effect on relationship continuance intentions

(t ¼ 5:6, p , 0.001 with a negative asymmetry, t ¼ 22:4, p , 0:01). However, this effect is completely mediated by overall satisfaction. As it can be observed, the t-value drops to

a non significant level after overall satisfaction is brought into

the regression (t ¼ 3:6, p , 0.01). This means that delivering a consistently high level of advertising results to large

accounts is critical for keeping them satisfied, which in turn

determines their level of loyalty to the service provider. In

contrast, it seems that small accounts are not as influenced by

the service outcome, which failed to show a significant effect

on either satisfaction or relationship continuance intentions.

Hence, overall, H1 is supported. In contrast, reliability, which is the technical service quality

dimension, has a significant positive direct impact on small

accounts’ relationship continuance intentions (t ¼ 3:5, p , 0.01) with a negative asymmetric effect (t ¼ 21:8, p , 0.1). This effect is not mediated by customers’ overall

satisfaction. In fact, reliability seems not to play a significant

role in determining satisfaction. Instead, it has an additional

effect on relationship continuance intentions, after the effect

of overall satisfaction has been accounted for. Interestingly, as

noted before, reliability has no significant effect in the case of

large accounts. This means that, for small accounts,

satisfaction and relationship continuance intentions are at

least partially determined by different aspects of service

quality. Further, while overall satisfaction remains the most

important factor in retaining all type of customers, small

customers tend to be particularly sensitive to reliability issues,

which act as a utility preserving factor, when considering

repurchasing from the same service provider. Hence H2 is

partially supported. Finally, as proposed in the third hypothesis, functional

service quality seems to have a significant effect on small

accounts but not on large accounts. More specifically, small

customers’ overall satisfaction is positively impacted by rep’s

assurance (t ¼ 2:4, p , 0.05) and empathy (t ¼ 2:8, p , 0.01). While assurance seems to have a symmetrical effect, empathy

seems to have a fairly strong negative asymmetry (t ¼ 23:4, p , 0.01) which suggests that small accounts tend to view rep’s

understanding and caring behavior as an important utility

preserving factor. The same pattern of effects is displayed for

relationship continuance intentions. However, the effects of

both assurance and empathy on relationship continuance

intentions are completely mediated by overall satisfaction (as

seen in Table III, the respective t-values of 2.5 and 2.4, both

significant at p , 0.05, drop to non significant levels when

overall satisfaction is brought into the regression). This means

that while large accounts seem to be less sensitive to the quality

of reps’ interaction, small accounts’ satisfaction and, in turn,

repurchase intentions, are significantly determined by rep’s

assuring and nurturing behavior. Therefore, H3 is supported.

As in the case of account size, new and mature accounts do

not differ in terms of service quality perceptions, satisfaction

or relationship continuance intentions (all t-tests for mean comparisons are not significant). However, important

differences are found in the impact of service quality. As

reported in Table IV, service outcome has a significant positive impact on the newer accounts’ overall satisfaction

(t ¼ 2:5, p , 0.05) and relationship continuance intentions (t ¼ 2:7, p , 0.01). It is important to note that both these effects are symmetrical and that the impact on relationship

continuance intentions is, in fact, completely mediated by satisfaction. In contrast, service outcome seems to not have

any significant effects in the case of mature accounts. These findings suggest that customers with mature relationships may

be accustomed to receiving a certain level of results from the

advertising services provider and therefore are only slightly affected by perceptions of service outcome. In contrast, new

customers seem to be particularly sensitive to the service

outcome, which provides support for H4. Further, the reliability of the service provision process

seems to be a significant factor in retaining the new customers. As indicated in Table IV, in the case of newer

accounts, reliability has no effect on satisfaction but it has a

positive influence on relationship continuance intentions (t ¼ 1:9, p , 0.1). In addition, after controlling for overall satisfaction, the effect of reliability on relationship continuance intentions is even stronger (t ¼ 3:4, p , 0.001) and it displays a significant negative asymmetry (t ¼ 23:5, p , 0.001). In other words, among customers with similar levels of overall satisfaction with the service provider, new

customers are more likely to end the relationship when

receiving lower than average service reliability, than they are likely to continue the relationship when they receive higher

than average service reliability. Thus, reliability is an important hygiene factor in retaining the new accounts, but

it seems to be an indifferent factor for mature accounts. These

findings provide support for H5. Finally, functional quality seems to be important, although

in different ways, for both newer and mature accounts. Consistent with H6, in the case of mature accounts, empathy has a strong positive impact (t ¼ 4:7, p , 0.001) with negative asymmetry (t ¼ 21:9, p , 0.1) on customers’ overall satisfaction. In addition, empathy has a totally mediated

effect, through satisfaction, on relationship continuance intentions (t ¼ 3:2, p , 0.01, drops to a non significant level when satisfaction is also regressed on relationship continuance

intentions). In fact, in the case of mature accounts, empathy is the only service quality dimension which has a significant

impact on customers’ satisfaction and intentions to continue

the relationship with the service provider. In contrast, for newer accounts, all dimensions of service quality play a role in

customers’ satisfaction and retention. In addition to service outcome and reliability, it seems that assurance has an

important positive effect on new customers’ overall

satisfaction (t ¼ 2:8, p , 0.01) and empathy has a significant direct positive effect, independent from that of

satisfaction, on relationship continuance intentions (t ¼ 2:4, p , 0.05). Therefore, the support for H6 is inconclusive.

Discussion

The reported findings suggest that in the context of

professional B2B services, it is appropriate to conceptualize

Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

365Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

C o p yr

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2 0 0 7 . E

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ld P

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h in

g L

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ll ri g h ts

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rv e d .

Ta b le

IV D

if fe

re n

ce s

b et

w ee

n ac

co u

n ts

w it

h re

la ti

ve ly

n ew

er ve

rs u

s m

at u

re re

la ti

o n

sh ip

s in

th e

as ym

m et

ri c

im p

ac t

o f

se rv

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q u

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si o

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R e la ti v e ly

n e w e r a cc o u n ts

(t w o ye a rs

o r le ss )

R e la ti v e ly

m a tu re

a cc o u n ts

(f o u r ye a rs

o r m o re )

O v e ra ll sa ti sf a ct io n

R e la ti o n sh ip

co n ti n u a n ce

in te n ti o n s

(1 )

R e la ti o n sh ip

co n ti n u a n ce

in te n ti o n s

(2 )

O v e ra ll sa ti sf a ct io n

R e la ti o n sh ip

co n ti n u a n ce

in te n ti o n s

(1 )

R e la ti o n sh ip

co n ti n u a n ce

in te n ti o n s

(2 )

b t- v a lu e

b t- v a lu e

b t- v a lu e

b t- v a lu e

b t- v a lu e

b t- v a lu e

O u tc o m e

0 .4

4 * *

2 .5

* *

0 .5

0 * * *

2 .7

* * *

0 .1

9 1

.3 0

.3 0

1 .3

0 .3

6 1

.4 0

.1 8

0 .8

D p o si ti v e o u tc o m e a

2 0

.0 5

2 0

.3 2

0 .1

6 2

0 .9

2 0

.1 1

2 0

.9 0

.0 6

0 .3

2 0

.0 6

2 0

.2 2

0 .0

9 2

0 .4

R e li a b il it y

2 0

.1 4

2 1

.0 0

.2 8 *

1 .9

* 0

.3 8 * * *

3 .4

* * *

0 .2

0 1

.1 2

0 .0

1 2

0 .1

2 0

.1 3

2 0

.7

D p o si ti v e re li a b il it y

0 .1

8 1

.1 2

0 .3

2 *

2 1

.9 *

2 0

.4 4 * * *

2 3

.5 * * *

2 0

.0 9

2 0

.6 2

0 .0

0 2

0 .0

0 .0

5 0

.3 2

A ss u ra n ce

0 .5

7 * * *

2 .8

* * *

0 .2

6 1

.2 2

0 .1

4 2

0 .8

2 0

.2 3

2 1

.0 2

0 .0

8 2

0 .3

0 .0

6 0

.3

D p o si ti v e a ss u ra n ce

2 0

.0 5

2 0

.2 0

.0 9

0 .4

0 .1

2 0

.8 0

.2 8

1 .3

0 .1

2 0

.5 2

0 .0

4 2

0 .2

E m p a th y

0 .0

7 0

.4 0

.3 9 *

2 .0

* 0

.3 4 * *

2 .4

* *

0 .8

0 * * *

4 .7

* * *

0 .6

4 * * *

3 .2

* * *

0 .1

6 0

.7

D p o si ti v e e m p a th y

2 0

.1 6

2 0

.8 2

0 .1

6 2

0 .8

2 0

.0 5

2 0

.3 2

0 .3

1 *

2 1

.9 *

2 0

.0 5

2 0

.2 7

0 .1

3 0

.8

O v e ra ll sa ti sf a ct io n

0 .7

0 * * *

6 .0

* * *

0 .6

0 * * *

3 .8

* * *

M o d e l st a ti st ic s

n ¼

5 1

n ¼

5 1

n ¼

5 1

n ¼

4 9

n ¼

4 9

n ¼

4 9

F ¼

1 2 :2

* * *

F ¼

1 1 :1

* * *

F ¼

1 1 :8

* * *

F ¼

1 2 :3

* * *

F ¼

7 :9

* * *

F ¼

1 1 :0

* * *

R 2 ¼

0 :7

0 R

2 ¼

0 :6

7 R

2 ¼

0 :8

2 R

2 ¼

0 :7

1 R

2 ¼

0 :6

1 R

2 ¼

0 :7

1

N o te s:

St at

is ti

ca lly

si g

n ifi

ca n

t co

ef fi

ci en

ts (t

w o

-t ai

le d

te st

): * p ,

0 .1

; * * p ,

0 .0

5 ; * * * p ,

0 .0

1 ;

b Si

g n

ifi ca

n t

n eg

at iv

e co

ef fi

ci en

ts in

d ic

at e

n eg

at iv

e as

ym m

et ry

fo r

th e

co rr

es p

o n

d in

g se

rv ic

e q

u al

it y

d im

en si

o n

s

Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

366Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

C o p yr

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2 0 0 7 . E

m e ra

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u b lis

h in

g L

im ite

d . A

ll ri g h ts

r e se

rv e d .

and measure service quality along the dimensions of service

outcome, technical quality and functional quality (see Grönroos, 1984; Szmigin, 1993). The results indicate that,

along the service dimensions-satisfaction-retention chain, there are significant negative asymmetric effects and that the

mediating role of satisfaction ranges from zero to full mediation, which supports the recent concerns expressed in

the literature to avoid oversimplifications in the satisfaction chain (e.g. Anderson and Mittal, 2000; Kumar, 2002;

Zeithaml, 2000). Further, and most important, this paper shows that the links in the satisfaction chain display significant

differences across different customer segments and therefore suggests that studies on the impact of service quality on

customer relationship maintenance should avoid aggregating customers (see, e.g. Anderson and Mittal, 2000; Finn and

Kayande, 1998). The findings of this study should be interpreted within the

limits of this exploratory study. Surveying customers of one organization in one industry, while increasing the ability to

identify asymmetric effects that are specific to a situation, reduces the generalizability of the findings. Future studies

should try to investigate a class of similar services and organizations and compare results for similar customer

segments. Further, this study employed only two segmentation variables, account size and relationship length,

while many other variables could be investigated. For example, Driver and Johnston (2001) proposed to segment service

customers as relaters, who consider soft quality to be relatively more important than hard quality, versus nonrelaters, who

consider hard quality more important. Finally, this study focused on the asymmetric effects of service quality and did not

take into consideration other factors that may drive customers’ satisfaction and retention. One such factor, which should

receive more attention, is customers’ perception of their costs or sacrifice. This factor, in conjunction with service quality,

determines the value of the service, which may be another mediator in the attribute-satisfaction-retention chain (e.g. Choi

et al., 2004; Kumar, 2002).

Managerial implications

In spite of limitations, the findings of this research suggest

some important implications for services managers. First, managers should invest resources in improving low

performance in the service quality dimensions with strongest impact on customer satisfaction and highest negative

asymmetry. As noted, there are important differences between large and small customers, which may be

overlooked by service providers. Delivering results through the service outcome is the dominant factor in satisfying and

retaining large accounts. This factor has a utility-preserving character that means that managers should do everything

possible to avoid disappointing large customers in terms of service outcomes. However, these large customers seem to be

less interested in the quality of the rep’s interaction. While service providers put more time and effort in the interpersonal

interaction with large accounts, they should rather direct this attention to the small accounts, which tend to perceive

functional quality as a key, utility preserving attribute. These findings suggest that while large accounts seem to employ a

rational evaluation model of the professional service, small accounts may be more likely to employ a relationship generalization model, in which service provider’s

relationship development behaviors drive their satisfaction

with the core product (see Crosby and Stephens, 1987, for a

discussion of the models). In addition, it is important to recognize the importance of

the temporal perspective. Attributes important to newly

acquired customers are different from the ones important to

long-time customers. Managers should employ a dynamic

attribute importance model (see Mittal and Katrichis, 2000) to investigate the shifts in salience and nature of the relevant

service quality dimensions for customer relationship

maintenance. It seems that new accounts tend to be most sensitive to the more objective aspects of the service (results

and reliability). With time, customers seem to shift toward the

softer, more relational aspects of the service. Interestingly,

these findings seem to contradict Mittal et al.’s (1999), conclusion that, during early stages of building a relationship,

suppliers should focus on services and interpersonal aspects of

the exchange, and only later focus on the core product of the

consumption system. It may be that the shift in time from hard to soft service quality happens mostly in B2B service

contexts, while an opposite shift from soft to hard quality may

happen in business-to-customer (B2C) contexts. Finally, it is important to identify the exact effect of a

service attribute on satisfaction and on customer retention. In

this study, reliability seems to be a significant utility- preserving factor with an important direct effect on

customer retention, independent of satisfaction, in the case

of small and relatively newer accounts. If managers monitor

solely customer satisfaction, they may miss critical factors that drive customer retention, which is the ultimate goal in

customer management.

References

Anderson, E.W. and Mittal, V. (2000), “Strengthening the

satisfaction-profit chain”, Journal of Service Research, Vol. 3 No. 2, pp. 107-20.

Baron, R.M. and Kenny, D.A. (1986), “The moderator-

mediator variable distinction in social psychological

research: conceptual, strategic, and statistical considerations”, Journal of Personality and Social Psychology, Vol. 51 No. 6, pp. 1173-82.

Bendapudi, N. and Berry, L.L. (1997), “Customers’ motivations for maintaining relationships with service

providers”, Journal of Retailing, Vol. 73 No. 1, pp. 15-37. Bolton, R.N. (1998), “A dynamic model of the duration of the consumer’s relationship with a continuous service

provider: the role of satisfaction”, Marketing Science, Vol. 19 No. 1, pp. 45-65.

Brady, M.K. and Cronin, J.J. (2001), “Some new thoughts on

conceptualizing perceived service quality: a hierarchical

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Journal of Services Marketing

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Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

368Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

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About the authors

Simona Stan is an Assistant Professor of Marketing at the University of Montana. She received her PhD in marketing from the University of Missouri. Her research interests are in marketing management, services marketing, international marketing, and customer relationships. Her work has been published in International Marketing Review, Journal of Relationship Marketing, Journal of Euro-marketing among others as well as numerous conference proceedings. Simona Stan is the corresponding author and can be contacted at: [email protected] Kenneth R. Evans is the Dean of the Price College of

Business and the Fred E. Brown Chair of Business at the University of Oklahoma. He has published in the Journal of Marketing, Journal of the Academy of Marketing Science, Journal

of Personal Selling and Sales Management among others as well

as numerous conference proceedings. His research interests

are in sales and service marketing. Charles M. Wood is an Associate Professor of Marketing at

the University of Tulsa. He received his PhD from the

University of Missouri. His work has been published in the

Journal of Retailing, Journal of Advertising among others and in

numerous conference proceedings. His research interests are

in consumer behavior and services marketing. Jeffrey L. Stinson is an Assistant Professor at the North

Dakota State University. He received his PhD from the

University of Oregon. His research interests are in sports

and services marketing. He has published in a number of

sports marketing and marketing related conference

proceedings.

Segment differences in the asymmetric effects of service quality

Simona Stan, Kenneth R. Evans, Charles M. Wood and Jeffrey L. Stinson

Journal of Services Marketing

Volume 21 · Number 5 · 2007 · 358–369

369

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Business to Business Services - Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century : Multiple Markets and Multi-Disciplinary Perspectives for the Twenty-First Century, edited by Katherine Tyler, et al., Emerald Publishing Limited, 2007. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/harrisburg-ebooks/detail.action?docID=320647. Created from harrisburg-ebooks on 2020-12-01 07:24:33.

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