Is There a Halo Effect in Satisfaction Formation in Business-to-Business Services?

Abstract

Despite the growing number of longitudinal investigations of customer satisfaction, the occurrence and type of dynamic effects within satisfaction formation has not been entirely clarified. This article explores these dynamic effects on both the level of attribute and overall service satisfaction and investigates whether the halo effect that has been identified in a business-to-consumer context also emerges in business relations. The results show that in our empirical example, within-level dynamic effects dominate, whereas halo effects are weak. In light of evidence regarding nonlinear effects in satisfaction formation, this study also investigates nonlinearities. The dynamic relations in our empirical example show a positive asymmetry, meaning that favorable satisfaction evaluations have a greater propensity to carry over to the next period than do less favorable ones. Therefore, customers in the long-term business relations of this study maintain a certain tolerance toward their service provider, which limits the diagnostic power of current satisfaction ratings to detect problems in the relationship.

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