The study investigated how situational characteristics moderate the relationship between customer satisfaction and loyalty in a business-to-business context. A survey of 425 European businesses found that the satisfaction-loyalty link depends on factors like perceived purchase importance, uncertainty, and switching costs. It also found that the relationship is stronger for existing versus new customers. The results partially supported the hypotheses and provided implications for investing more in satisfying long-term versus new customers.

1. Situational Characteristics as
Moderators of the
Satisfaction-Loyalty Link
An Investigation in a Business-to-Business Context
Florian v. Wangenheim
University of Dortmund

2. Overview
In business, the relationship between satisfaction and
loyalty is of fundamental importance.
A study of 425 European businesses was conducted with
results showing that the relationship between them is
dependent on different contextual factors.
When analysing the results, they pointed towards focusing
on specific customer groups as opposed to the price of the
product.

3. Overview
It is assumed that higher levels of loyalty equate to
higher levels of success in the marketplace.
Evaluating what it is to be a loyal customer (if dependent
on satisfaction) proves to be challenging as we need to
understand the asymmetries between them.
It is possible to infer that differences do occur between
the satisfaction-loyalty link and from this; it may be
possible to segment customer groups accordingly.

4. Overview
A strong desire for a business to business application
of such research is called on to confirm such findings.
In the paper, hypotheses in the business to business
market are tried and tested and further elucidation of
their results show some interesting indications.

5. Overview of the Hypotheses
H1: The more satisfied a customer is, the higher her/
his loyalty will be.
H2: The relationship between satisfaction and loyalty is
stronger when perceived purchase importance is
high.
H3: The relationship between satisfaction and loyalty is
weaker when perceived purchase uncertainty is
high.
H4: The relationship between satisfaction and loyalty is
weaker when switching costs are high.
H5: The relationship between satisfaction and loyalty is
stronger for old than for new customers.

6. Satisfaction and Loyalty
Positive relationship
Loyalty: “deeply held commitment to rebuy a preferred
product or service in the future” (Oliver, 1997).
Loyalty is based upon relationships.
Relationship Satisfaction View (Kelley, 1959) believes that
satisfying experiences increase the motivation for
customers to remain in a purchasing relationships.
Expectations of future costs and benefits are also
influenced by these prior experiences in this relationship.

7. Perceived Purchase Importance
Satisfaction Loyalty
Product Importance: “the buyer’s
perception of the significance of
the buying decision.” (Bunn, 1993)
“The buyer will take into consideration
the future impact of the purchase to
the functioning firm.” (Bunn, 1993)

8. Perceived Purchase Importance
High Perceived Strong Purchase Importance
Importance
Small Differences in Expected
and Actual Levels of
Performance being Noticed
Bigger Chance of Product
Termination due to Trust being
Broken
When perceived purchase importance is taken into account, the
relationship between satisfaction and loyalty may be even stronger.
More Thorough Research

9. Perceived Purchase Uncertainty
High Degree of Purchase Uncertainty
Low Commitment of the Customers
Low Resistance to Marketing Efforts and Price
Tactics of Competitiors
Even if the degree of the customer satisfaction is high, the customer loyalty tends to
be lower if the customers feel uncertain about the quality of the product/service

10. Switching Costs
Transaction-Specific Investments
Switching Suppliers Strongly Inhibited
In case of dissatisfaction, high switching costs can still outweigh switching
benefits.

11. Duration of Customer Relationship
?
DURATION = LOYALTY
Duration of business relationship
ONLY as a behavioral variable
Independent of attitudinal loyalty

12. Duration of Customer Relationship
New Customers VS. Old Customers
Driven by the
“newness” of the situation Rely on past experiences
Transactional Relational
Low satisfaction-retention Stronger satisfaction-
link retention link
Cumulative TIME rather than one-time satisfying experience

13. Duration of Customer Relationship
Hypothesis 5:
“The relationship between
satisfaction and loyalty is stronger
for old than for new customers.”

14. Research Method
German Market for Industrial Energy Design
Necessary service
Buying decisions reviewed by a single person
Recent liberalization of German energy market
Trained interviewers conducted the survey via
telephone (total of 418 questionnaires)
Samples randomly drawn

15. Research Method
Scales from previous researches were used
Measuring customer satisfaction and customer loyalty

16. Results and Discussion
HYPOTHESIS 1: STRONGLY SUPPORTED
Satisfaction exhibits positive, statistically significant
influence on both types of loyalty.

17. Results and Discussion
HYPOTHESIS 2: PARTIALLY SUPPORTED
High Purchase Importance  stronger relationship
between satisfaction and active loyalty.
No significant findings for passive loyalty.
HYPOTHESIS 3: PARTIALLY SUPPORTED
High Purchase Uncertainty  weaker relationship
between satisfaction and passive loyalty.
No significant findings for active loyalty.

18. Results and Discussion
HYPOTHESIS 4: PARTIALLY SUPPORTED
High Rate of Switching Costs weaker relationship
between satisfaction and active loyalty.
No significant findings for passive loyalty.
HYPOTHESIS 5: FULLY SUPPORTED
Effect on old customers > effect on new customers

19. Managerial Implications
Long term relationships customers
Investing in service quality and increasing satisfaction will
increase retention rates and loyalty behavior
New customers
Investing in service quality and increasing satisfaction must be
based on a careful cost-benefit analysis, as they are more likely
to defect, since high satisfaction is not a strong predictor of
retention for them.
The effect of satisfaction is stronger on active than passive
loyalty.

20. Limitations and Future Research
Limitations Future research
Not generalizable as the Test if the effect could be
sample was limited to one confirmed in other
industry and one country. industries.
Some hypotheses were not
confirmed.

21. Thank you for listening!