Assessing And Managing The Costs Of Satisfaction In B2B Services

Customer satisfaction has long been considered top priority in B2B markets: it is widely accepted, indeed, that business suppliers’ success in the markeplace is deeply intertwined with their ability to look beyond the discrete transaction, and to establish long-standing relationships with customers. Customer satisfaction is however costly. While buyers pay growing attention to suppliers’ ability of adding value to the business offering from the very beginning until the very end of the supplying process, competition facilitates switching behaviours, and makes customers more reluctant to pay premium prices to suppliers that are excellent in managing their satisfaction. It turns out that satisfied customers can sometimes result in dissatisfaction of their suppliers, until extreme cases where customer relationships turn from assets to liabilities. Although such an issue has been discussed thus far mostly in consumer markets, there are hints from recent studies about the relevance of controlling for the efficiency of business customer relationships over time. Indeed, the nature itself of a wide portion of business markets, where few customers account for large shares of suppliers’ portfolios, and thus are key for engendering not only revenues but also costs, suggests that economics of customer satisfaction have to be kept in the highest consideration. This brings the question of how business marketers can reconcile their effectiveness in satisfaction management with their efficiency in managing those costs they incur in attaining satisfaction. Indeed such an issue is receiving growing attention in consumer marketing settings, particularly when it comes to the intangible components of value propositions. Elsewhere (Cugini, Carù and Zerbini, 2007), we have shown how intangible offerings require a re-framing of the assessment of satisfaction and its costs, basing upon the relevance that service components assume for customer segments, and the absorption of costs on those company activities that are related to the production and delivery of those components. In the present article, we build on this research in order to extend it to the management of satisfaction costs of business customers. In that context, traditional segmentation-based analyses poorly fit with satisfaction management. Customization instances are far much relevant, and push towards ad one-to-one solutions whose costs should be assessed on an individual, rather than a group basis. In shifting the unit of analysis, we will provide a guidance to allow cost analysis at the single customer level, thus enabling assessing the economics of one-to-one strategies based on intangible offerings. Therefore, we will answer to recent calls on research in business service settings, and on linking satisfaction and profitability as well. In this article we provide a review of prior studies on the satisfaction-cost management relationships, looking both at the accounting and the marketing domain of research, then we discuss the framework of cost satisfaction management already developed for consumer settings - highlighting the adaptations to be performed once shifting to B2B services – to provide a test of this framework on the case of the customers of an advertising business; finally, we discuss how the analysis of business services contributes to the development of a more generalizable framework on the management of satisfaction costs, and will show the implication for practice and the limitations of our analysis.