From customer value to repurchase intentions and recommendations

Doina Olaru · Sharon Purchase · Nathan Peterson

172 citations0/0 files storedJournal of Business and Industrial Marketing

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Customer Service Quality and Loyalty Service and Product Innovation Customer churn and segmentation

Abstract

Purpose The paper aims to fill a gap in the literature in relation to the determinants of customer value within the research and development (R&D) industry and word‐of‐mouth. It investigates whether context specific variables, such as organizational type and contract length, change customer value evaluations and the value – intention to repurchase – recommend system. Design/methodology/approach A survey of Australian customers of a research and development service organization was conducted. Structural equation modelling was used to develop a model investigating factors that affect customer value, intent to re‐purchase, and word‐of‐mouth/recommendation. Findings Relationship benefits, service benefits and sacrifice all had a significant influence on customer value. Efficient use of time is crucial for sacrifice evaluation. Relationship benefits were larger for government organizations than private organizations. Importance of value to recommend the organization to others was higher for longer contracts and government customers. Research limitation/implications Results show that R&D organizations need to concentrate on both the technical service/science aspects and the relationship aspects in their contracts. Government institutions tended to emphasize the relationship benefits while private businesses considered service benefits, relationship benefits and sacrifice nearly equal in their determination of value. Intent to contract R&D organization for further work and the willingness to recommend it to others as a highly specialized and competent service provider seem to be higher for government customers and longer contracts. Originality/value This paper investigates customer value in a little researched industry, R&D. The findings are relevant for similar professional business‐to‐business services.

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References

1988Structural equation modeling in practice: A review and recommended two-step approach.1994The Commitment-Trust Theory of Relationship Marketing 1988Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence 1992Measuring Service Quality: A Reexamination and Extension 1993Lisrel 8: Structural Equation Modeling With the Simplis Command Language 1991Effects of Price, Brand, and Store Information on Buyers' Product Evaluations 1986Introduction to Classical and Modern Test Theory 2002Principles and practice in reporting structural equation analyses.

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