Directory UMM :Data Elmu:jurnal:T:Transportation Research_Logistics & Transportation Review:Vol35.Issue2.Jun1999:
Transportation Research Part E 35 (1999) 121±134
Customer satisfaction and loyalty in supply chain: the role of
communication
Alexander E. Ellinger
a
a,*
, Patricia J. Daugherty b, Quentin J. Plair
c
Villanova University, College of Commerce and Finance, Department of Marketing, 800 Lancaster Avenue, Villanova,
PA 19085-1678, USA
b
The University of Oklahoma, Division of Marketing, 307 West Brooks, Room 1, Norman, OK 73019-0450, USA
c
Pepsi Cola, 1201 Dowry Drive, Lawrenceville, GA 30244, USA
Received 18 September 1997; received in revised form 15 May 1998; accepted 18 December 1998
Abstract
Communication between buyers and sellers is central to the supply chain philosophy. Further, the trend
toward more detailed customer demands has made it even more important for ®rms to solicit input and
feedback from their customers in order to better tailor their oerings to customer needs. Previous research
suggests a strong linkage between customer satisfaction and customer loyalty. Highly satis®ed customers
are more loyal than less satis®ed customers. Thus, it was hypothesized that ®rms proactively seeking information from customers should realize a ``pay o'' in terms of more satis®ed and, subsequently, more
loyal customers. A survey of buyers in the personal products industry was used to examine three methods of
listening to customers. Frequency of vendor meetings with customers, formalized contact through the
solicitation of feedback and/or conducting surveys, and personal visits by senior vendor managers were
found to be related to customer satisfaction as well as customer loyalty. Ó 1999 Elsevier Science Ltd. All
rights reserved.
1. Introduction
Many world-class ®rms have adopted a supply chain perspective in recent years. Such a
business philosophy requires that trading partners ``jointly plan, execute, and co-ordinate logistical performance'' (Bowersox, 1991). Sharing of information and plans provides the potential to
make channels more ecient and competitive (Closs et al., 1997; Daugherty et al., 1996; Ellram
and Cooper, 1990; Gopal and Cypress, 1993). Thus, in recent years, many sellers have placed
increased emphasis on listening to their customers in order to tailor their product and service
*
Corresponding author. Tel.: +1 610 519 6055; fax: +1 610 519 5364; e-mail: [email protected]
1366-5545/99/$ ± see front matter Ó 1999 Elsevier Science Ltd. All rights reserved.
PII: S 1 3 6 6 - 5 5 4 5 ( 9 9 ) 0 0 0 0 6 - X
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A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
oerings to the customers' needs. Within the customer satisfaction literature, this is referred to as
``voice of the customer''. Listening to customers (and, subsequently, responding to their desires/
requests) should have a ``pay o'' in terms of more satis®ed and more loyal customers. Does it?
The following sections present an overview and results of a recent survey addressing those issues.
2. Voice of the customer
Customer satisfaction involves keeping customers happy both in day-to-day interactions and
from a more global, long-term perspective (Hunt, 1977; Johnson and Fornell, 1991). Competitive
pressures mandate that ®rms identify customer requirements and develop strategies that allow
them to meet or beat the service levels provided by other vendors (Verwijmeren et al., 1996).
Such customer-oriented contacts typically focus on determining relevant dimensions of service
and/or products as well as an assessment of the customers' perceptions of how well the selling ®rm
is doing in meeting those expectations (Sterling and Lambert, 1987). Excessive problems frequently translate to customer defections. However, it is less clear if the reverse is true. Is greater
customer contact related to customer loyalty?
Loyalty has been de®ned as a long-term commitment to repurchase involving both repeated
patronage and a favorable attitude (Dick and Basu, 1994). The development, maintenance, and
enhancement of customer loyalty represents a fundamental marketing strategy for attaining
competitive advantage (Gould, 1995; Kotler, 1988; Reichheld, 1993). The current research addresses that issue by examining the two dimensions of customer loyalty ± repurchase intentions
(repeat patronage) and commitment to the relationship (favorable attitude).
Repurchase intentions encompass the customer's perceptions of continuity expectations such as
relationship renewal (Kumar et al., 1995) and the customer's willingness to recommend the
supplier to a successor (Cronin and Morris, 1992). Commitment exists only when the relationship
is considered important, when a committed partner wants the relationship to continue inde®nitely, and when the partner is prepared to work at preserving it (Morgan and Hunt, 1994).
Indications of relationship commitment include sharing of con®dential information, intentions to
allocate future investments in the relationship, and level of assets and/or resources already
committed to the relationship (Gundlach et al., 1995).
The focus of the research is on one key component of business ± distribution service. The actual
delivery of the product (or service) is critical to achieving customer satisfaction/success (Sterling
and Lambert, 1989). While a number of customer employees are usually involved in purchase
decisions, few could argue the critical in¯uence of one group ± buyers. Therefore, buyers were
surveyed regarding distribution service provided by key vendors within their industry. Based upon
the premise that communication (between buyers and sellers) should in¯uence customer satisfaction as well as customer loyalty, the research sought answers to the following questions:
Q. 1(a) ± Is frequency of meeting with vendor distribution personnel related to customer satisfaction?
Q. 1(b) ± Is frequency of meeting with vendor distribution personnel related to customer loyalty?
Q. 2(a) ± Is regular, formalized vendor contact related to customer satisfaction?
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
123
Q. 2(b) ± Is regular, formalized vendor contact related to customer loyalty?
Q. 3(a) ± Are personal visits by vendors' senior managers related to customer satisfaction?
Q. 3(b) ± Are personal visits by vendors' senior managers related to customer loyalty?
3. Research setting and methodology
The research was sponsored by a leading US manufacturer of personal products interested in
examining industry-speci®c dimensions of customer satisfaction. Initial research eorts focused on
in-depth interviews with the manufacturer's employees (account representatives, customer service
personnel, and a person from the credit area) and customers (buyers and distribution personnel).
A total of 15 telephone interviews were completed. The interviews each lasted approximately 20
min. Information obtained during the interviews helped to identify relevant dimensions of distribution service. The information was subsequently used to develop a six-page survey.
A list of 230 customers' names and phone numbers was provided by the sponsor. Contact was
made with 200 buyers; 30 were unreachable. Of the 200 buyers contacted, 180 agreed to participate or asked to review the questionnaire before committing. The potential respondents were
given the option of receiving the questionnaire by mail or FAX. Nearly three-quarters asked to
have the survey FAXed. Following distribution, 99 usable surveys were returned (43% response
rate).
Non-response bias was tested by comparing the last quarter of the respondent base (those
considered to be most similar to non-respondents) to earlier responses (Armstrong and Overton,
1977; Lambert and Harrington, 1990). Examination of relevant variables indicated that non-response bias was not an issue.
The survey instrument included questions on demographic information. Mean responses indicate that respondents, i.e., buyers, had responsibility for purchasing for 659 stores involving 313
product lines and 6425 SKU's. Mean annual corporate sales per respondent ®rm were slightly
over $2.4 billion. On average, the respondents' ®rms operated 3.5 distribution centers.
3.1. Frequency of meeting
Question 1(a) addresses the relationship between frequency of meeting with distribution service
personnel and overall customer satisfaction. More meetings with customers can enable suppliers
to solicit the detailed and timely input necessary to ensure that eorts are concentrated on areas
that are of particular importance to the customers. Focusing on key service areas has the potential
to increase levels of overall customer satisfaction.
The buyers were asked, ``On average, how many times per year do you meet with vendor
distribution personnel?'' Respondents answered for each of the six vendors (or for each of the
vendors they work with). The six manufacturers were identi®ed in the questionnaire; however, the
data are considered proprietary and the sponsoring ®rm has asked that the competitor set examined not be identi®ed.
Responses were divided into three groups: Group 1 includes the evaluations of vendors who
never meet with customers; Group 2 includes evaluations of vendors meeting with customers 1±3
times per year; and Group 3 includes evaluations of vendors meeting with customers four or more
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A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
times per year. These levels were chosen based upon the rationale that no meetings or only a few
meetings with customers may be perceived by customers as a sign of minimal commitment. Accordingly, four meetings or greater was considered appropriate as the third category. Pre-survey
interviews with the sponsoring ®rm's employees and customers had indicated the importance of
meeting with customers at least once per quarter.
Question 1(b) examines the relationship between frequency of meeting with distribution service
personnel and the two dimensions of loyalty ± repurchase intentions and relationship commitment. Greater familiarity with customer operations and requirements ± the product of more
frequent meetings ± may help vendor distribution personnel to evaluate additional opportunities
for identifying product/service enhancements. For example, more frequent meetings can suggest
service areas where vendors can be of assistance or identify merchandising opportunities. Such
constructive presence may encourage customers to buy more product. In addition, frequent
meetings between vendor distribution personnel and customers may be viewed as an indication
that both parties are committed to working to preserve the relationship.
3.2. Formalized contact
Manufacturing ®rms may not have the resources or the inclination to hold frequent meetings
with all of their customers. Geographical separations and the amount of business involved are
factors which can preclude regular face-to-face meetings between vendor distribution personnel
and their ®rm's customers. Where frequent face-to-face meetings are not feasible, the solicitation
of regular formal feedback by mail or telephone survey is an alternative method of gathering
information and feedback. The current research anticipated that such formalized contact would
positively impact customer satisfaction and customer loyalty. Questions 2(a) and (b) address the
relationship between regular, formalized vendor contact and the two previously discussed areas of
interest, overall customer satisfaction and customer loyalty.
The buyers were asked, ``Do these vendors regularly ask for formal feedback or conduct surveys of distribution service?'' Yes/no response categories were provided.
3.3. Senior management visits
Many ®rms rely upon senior management visits with customers to obtain valuable input and
feedback. High level executives have the authority to realign their own ®rms' operations in order
to be responsive to customer requests. Such initiatives are likely to be noticed by customers. Thus,
personal visits by senior management were expected to in¯uence customer satisfaction and customer loyalty. Questions 3(a) and (b) investigate these suggested associations.
To examine the relationships, the buyers were asked to indicate if their ®rms received personal
visits from senior managers representing the six vendor ®rms examined. As before, yes/no response categories were provided.
3.4. Customer satisfaction
To assess the buyers' overall level of satisfaction, they were asked to indicate how strongly they
agreed or disagreed with statements regarding their overall satisfaction with the distribution
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
125
service provided by each of the vendors. A 7-point scale was used (1 strongly disagree,
4 neutral, and 7 strongly agree). The satisfaction-related statements utilized were: we are
delighted with our overall (distribution service) relationship with them; we wish more of our
suppliers were like this one; it is a pleasure dealing with this supplier; and there is always some
problem or another with this supplier (reverse scored).
3.5. Loyalty
Repurchase intentions were assessed by asking the buyers the extent of their agreement with
four statements: we are likely to increase purchases from this vendor in the next year; we are likely
to decrease purchases from this vendor in the next year; all things being equal (price, product,
quality, etc.), we intend to buy more from this vendor because of their distribution service; and I
would recommend that my successor continue using this vendor.
Information relating to relationship commitment was collected by asking the buyers their
opinions regarding the following statements pertaining to their relationships with the six vendors
under examination: the relationship that my ®rm has with this ®rm is something we are very
committed to; the relationship that my ®rm has is something my ®rm intends to maintain inde®nitely; the relationship that my ®rm has with this vendor deserves our ®rm's maximum eort
to maintain; and, maintaining a long-term relationship with this vendor is very important to this
®rm.
Reliabilities for the satisfaction, repurchase intentions, and relationship commitment scales
were 0.827, 0.659 and 0.876, respectively.
4. Results
The following section presents the results of analyses examining the relationship between
various types of listening to customers and customer satisfaction/loyalty.
4.1. Frequency of meeting
It was expected that more meetings with distribution service personnel would be positively
related to customer satisfaction. Table 1 presents analysis of variance (ANOVA) results.
When comparisons were made between the three groups, signi®cant dierences were found,
although the results were not what was expected. For three of the four overall satisfaction items,
the buyers indicated higher levels of satisfaction for both the vendors meeting four or more times
per year and the vendors not meeting with customers at all than for the vendors meeting with
customers 1±3 times per year. Signi®cant dierences were found for: we are delighted with our
overall (distribution service) relationship with them; it is a pleasure dealing with this supplier; and
there is always some problem or another with this supplier. No signi®cant dierence was found
between groups for the remaining statement, ``we wish more of our suppliers were like this one''.
However, when all four items were summed into a single combination measure of overall
customer satisfaction, the vendors that met with their customers four or more times per year had
signi®cantly higher levels of overall customer satisfaction than both the other groups. As pro-
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Table 1
Customer satisfaction ratings by frequency of meetings (One-way ANOVA tests of dierences in means a )
Satisfaction with distribution service
We are delighted with our overall (distribution
service) relationship with them (SAT1)
We wish more of our suppliers were like this
one (SAT2)
It is a pleasure dealing with this supplier (SAT3)
There is always some problem or another with
this supplier (SAT4) c
Combination measure
a
b
c
Meetings with vendor distribution personnel
0
1±3
Mean (s.d.)
Mean (s.d.) Mean (s.d.)
5.39
b
(1.38) 4.95 (1.35)
5.03 (1.62)
5.35
2.05
b
b
4.86 (1.56)
(1.56) 4.85 (1.55)
(1.18) 2.39 (1.13)
17.61 (4.10)
4 or more
5.42
b
4.08 (510)
0.017
5.09 (1.70)
0.61 (506)
0.541
b
5.23 (517)
2.98 (517)
0.006
0.051
3.21 (489)
0.041
5.45
2.27
b
(1.34)
F-ratio (d.f.) P-value
(1.47)
(1.12)
17.06 (4.02) 18.22 b (3.74)
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
posed, the research provides at least partial support for the existence of a positive relationship
between frequency of meeting with distribution service personnel and customer satisfaction.
Table 2 presents analysis of variance (ANOVA) results for each of the two dimensions of
loyalty.
It was expected that more meetings with distribution service personnel would be positively
related to repurchase intentions. When comparisons were made between the three groups, signi®cant dierences were found, although, once again, the results were not what was anticipated.
As expected, the vendors meeting with customers four or more times per year generated signi®cantly higher agreement with the statement, ``we are likely to increase purchases from the vendor
in the next year'', than the vendors meeting 1±3 times per year and the vendors that did not meet
with customers at all. For the statement, ``all things being equal (price, product, quality, etc.), we
intend to buy more from this vendor because of their distribution service'', the vendors meeting
four or more times and the vendors meeting 1±3 times per year both had signi®cantly higher
repurchase intentions than the vendors that did not meet with customers at all. There was no
signi®cant dierence between the three groups on the remaining two repurchase intentions items:
we are likely to decrease purchases from this vendor in the next year, and I would recommend that
my successor continue using this vendor.
As with overall customer satisfaction, when all four items were aggregated into a single combination measure of overall repurchase intentions, the vendors that met with their customers four
or more times per year had signi®cantly higher levels of repurchase intentions than the other
groups. Therefore, a positive relationship between frequency of meeting with distribution service
personnel and repurchase intentions was supported.
It had been predicted that more meetings with distribution service personnel would be positively related to relationship commitment. However, when comparisons were made between the
three groups, no signi®cant dierences were found for any of the four individual relationship
commitment items, or for the single combination measure of relationship commitment comprising
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A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Table 2
Customer loyalty ratings by frequency of meetings (One-way ANOVA tests of dierences in means a )
Meetings with vendor distribution personnel
0 meetings
1±3 meetings 4 or more meetings F-ratio (d.f.) P-value
Mean (s.d.) Mean (s.d.)
Repurchase intentions
We are likely to increase purchases from
this vendor in the next year (REP1)
We are likely to decrease purchases from
this vendor in the next year (REP2) c
All things being equal (price, product,
quality, etc.), we intend to buy more from
this vendor because of their distribution
service (REP3)
I would recommend that my successor
continue using this vendor (REP4)
Combination measure
Relationship commitment
The relationship that my ®rm has with
this ®rm is something we are very
committed to (COM1)
The relationship that my ®rm has with
this ®rm is something my ®rm intends
to maintain inde®nitely (COM2)
The relationship that my ®rm has with
this vendor deserves our ®rm's maximum
eort to maintain (COM3)
Maintaining a long term relationship with
this vendor is very important to my ®rm
(COM4)
Combination measure
a
b
c
Mean (s.d.)
0.037
2.11 (1.26)
0.06 (513)
0.944
b
6.07 (504)
0.003
6.12 (1.17)
0.53 (505)
0.588
b
4.20 (489)
0.016
5.58 (1.33)
5.86
2.11 (1.32)
2.06 (1.30)
3.91 (1.56)
4.39
6.02 (1.25)
6.18 (1.26)
b
(1.55)
17.68 (2.64) 18.21 (2.72)
b
3.31 (516)
5.54 (1.46)
4.48
18.53
(1.28)
(1.78)
(2.89)
5.76 (1.44)
5.62 (1.34)
5.81 (1.24)
0.70 (522)
0.499
5.88 (1.31)
5.76 (1.41)
5.77 (1.43)
0.32 (510)
0.726
5.56 (1.49)
5.46 (1.44)
5.53 (1.43)
0.15 (522)
0.862
6.10 (1.28)
6.04 (1.21)
6.10 (1.10)
0.10 (521)
0.901
23.54 (4.50) 22.93 (4.53)
23.23 (4.44)
0.54 (508)
0.581
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
all four items. The current research failed to support a positive relationship between frequency of
meeting with vendor distribution personnel and relationship commitment.
4.2. Formalized contact
T-tests were used to identify dierences between the two groups: those formally requesting
feedback from their customers and those that do not solicit feedback with respect to distribution
service performance. The results for the association between formalized vendor contact and
overall customer satisfaction are shown in Table 3.
As anticipated, the buyers indicated signi®cantly higher satisfaction with the group that requested formal feedback from their customers than with the group that did not do so. Signi®cant
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Table 3
Customer satisfaction by formalized vendor contact (T-tests of dierences in means for customer satisfaction a )
Satisfaction with distribution service
Regular, formalized visits
Yes
We are delighted with our overall (distribution service) relationship with them (SAT1)
We wish more of our suppliers were like this one (SAT2)
It is a pleasure dealing with this supplier (SAT3)
There is always some problem or another with this supplier(SAT4) d
Combination measure
a
b
c
d
No
5.46
5.31
5.54
2.17
c
18.42
b
b
b
5.30
4.94
5.25
2.23
17.66
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates signi®cant dierences between means at 0.10.
Indicates reverse scoring.
dierences between groups were found on three of the four individual satisfaction items: we are
delighted with our overall (distribution service) relationship with them; we wish more of our
suppliers were like this one; and it is a pleasure dealing with this supplier. There was no signi®cant
dierence between groups on the ®nal satisfaction item: there is always some problem or another
with this supplier. Further, the ratings for the vendors soliciting formal feedback from customers
were signi®cantly higher in terms of overall satisfaction, i.e., on the single combination measure of
overall satisfaction comprising of all four items. Thus, the research supported a positive association between formalized vendor contact and overall customer satisfaction.
Positive relationships between formalized vendor contact and the two dimensions of loyalty
were also anticipated. Results of T-tests performed to examine the relationships are presented in
Table 4. The group that solicited formal feedback from customers had signi®cantly higher repurchase intentions ratings than the group not formally soliciting feedback, on three of the four
individual items: we are likely to increase purchases from this vendor in the next year; we are likely
to decrease purchases from this vendor in the next year; and all things being equal (price, product,
quality, etc.), we intend to buy more from this vendor because of their distribution service, as well
as on the single combination measure for overall repurchase intentions. There was no signi®cant
dierence between the two groups on the fourth item: I would recommend that my successor
continue using this vendor.
Similarly, the group of vendors that solicited formal feedback from customers generated signi®cantly higher relationship commitment than the group of vendors who did not, on all four
individual items, as well as on the single combination measure of overall relationship commitment. Thus, positive associations between formalized vendor contact and both dimensions of
loyalty were con®rmed by the research.
4.3. Senior management visits
Two groups were formed for analysis purposes: those vendors where senior managers made
personal visits to customers, and those vendors where they did not. T-tests were used to test for
dierences between the two groups; results are presented in Tables 5 and 6.
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A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Table 4
Customer loyalty by formalized vendor contact (T-tests of dierences in means for customer loyalty a )
Regular, formalized visits
Yes
Repurchase intentions
We are likely to increase purchases from this vendor in the next year (REP1)
We are likely to decrease purchases from this vendor in the next year(REP2) c
All things being equal (price, product, quality, etc.), we intend to buy more from
this vendor because of their distribution service (REP3)
I would recommend that my successor continue using this vendor (REP4)
Combination measure
Relationship commitment
The relationship that my ®rm has with this ®rm is something we are very committed
to (COM1)
The relationship that my ®rm has with this ®rm is something my ®rm intends to
maintain inde®nitely (COM2)
The relationship that my ®rm has with this vendor deserves our ®rm's maximum
eort to maintain (COM3)
Maintaining a long term relationship with this vendor is very important to my ®rm
(COM4)
Combination measure
a
b
c
6.10
1.92
4.60
No
b
5.57
2.18
4.18
b
b
6.19
6.07
18.79
b
18.00
6.19
b
5.63
5.98
b
5.75
5.84
b
5.42
6.33
b
6.00
24.34
b
22.92
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
Vendors whose senior managers personally visited customers generated signi®cantly higher
perceptions of overall satisfaction and loyalty than the vendors whose senior managers did not
make personal visits to customers. Firms whose senior management conducted customer visits
were rated signi®cantly higher on three of the four individual satisfaction items: we wish more of
our suppliers were like this one; it is a pleasure dealing with this supplier; and there is always some
problem or another with this supplier, as well as on the single combination measure for overall
Table 5
Customer satisfaction by senior management visits (T-tests of dierences in means for customer satisfaction a )
Satisfaction with distribution service
Senior management visits
Yes
We are delighted with our overall (distribution service) relationship with them (SAT1)
We wish more of our suppliers were like this one (SAT2)
It is a pleasure dealing with this supplier (SAT3)
There is always some problem or another with this supplier (SAT4) c
Combination measure
a
b
c
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
5.42
5.42
5.59
2.06
18.51
No
b
b
b
b
5.28
4.84
5.18
2.31
17.52
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A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Table 6
Customer loyalty by senior management visits (T-tests of dierences in means for customer loyalty a )
Senior management visits
Yes
Repurchase intentions
We are likely to increase purchases from this vendor in the next year (REP1)
We are likely to decrease purchases from this vendor in the next year(REP2) c
All things being equal (price, product, quality, etc.), we intend to buy more from
this vendor because of their distribution service (REP3)
I would recommend that my successor continue using this vendor (REP4)
Combination measure
Relationship commitment
The relationship that my ®rm has with this ®rm is something we are very committed
to (COM1)
The relationship that my ®rm has with this ®rm is something my ®rm intends to
maintain inde®nitely (COM2)
The relationship that my ®rm has with this vendor deserves our ®rm's maximum
eort to maintain (COM3)
Maintaining a long term relationship with this vendor is very important to my ®rm
(COM4)
Combination measure
a
b
c
No
6.17
1.96
4.55
b
6.43
b
5.94
19.05
b
17.79
6.11
b
5.60
6.05
b
5.67
5.84
b
5.36
6.22
b
6.00
24.22
b
22.74
b
b
5.47
2.22
4.13
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
satisfaction. There was no signi®cant dierence between groups for the ®nal satisfaction item: we
are delighted with our overall (distribution service) relationship with them.
In addition, vendors whose senior management conducted customer visits had signi®cantly
higher ratings on all of the individual loyalty items, as well as on the single combination measures
for repurchase intentions and relationship commitment. Therefore, the anticipated positive relationships between personal visits by senior management, and overall customer satisfaction and
customer loyalty, were con®rmed by this study.
4.4. Analysis of low volume accounts
To further examine the veracity of the causal links implied by the current research, additional
analyses were undertaken. Intuitively, transaction volume may also in¯uence associations between
contact behavior and attitude. For example, high volume accounts involve repeat business and,
therefore, are likely to generate the most visits. Thus, vendors were divided into high and low
volume accounts based upon information supplied by the sponsoring company. As expected,
signi®cant dierences (at the 0.05 level) were found between high and low volume accounts for
formal feedback and senior management visits. There was no signi®cant dierence between high
and low volume accounts for number of visits. These results suggest that volume does in¯uence
contact activity.
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A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Next, to better assess the potential impact of contact behavior, analysis was focused on only
low volume accounts. This allowed comparisons of accounts equal in terms of current volume, but
dierent in terms of level of contact. Low volume accounts were compared on satisfaction, repurchase intentions, and relationship commitment for each of the three individual types of contact
behavior. In addition, contact pro®le types were created for low volume accounts and comparisons on attitude were made between low volume accounts who received none of the three types of
contact behavior and low volume accounts who received either two or three of the three types of
contact behavior. Results for the T-tests of dierences between groups are presented in Table 7.
To summarize the results, low volume accounts who were visited three or more times per year
by vendors had signi®cantly (at 0.05 level) more favorable attitudes toward the vendors on 8 of 15
items than low volume accounts who were visited 0 to 2 times a year by vendors. Similarly,
vendors who requested formal feedback from low volume accounts generated signi®cantly higher
scores on ten of 15 attitudinal items than vendors who did not request formal feedback from low
volume accounts. It was also found that vendors whose senior management visited low volume
Table 7
Low volume accounts: dierences in individual contact behaviors (T-tests of dierences in means a )
Item
Regular, formalized
visits
Formal feedback
Senior management
visits
Contact behaviors
3 or more
No
Yes
No
2 or 3
5.33
4.92
5.27
6.0
17.48
5.52
5.55
5.73
6.12
18.68
5.34
4.86
5.27
5.94
17.45
5.55
5.55
5.74
6.09
18.77
5.68
6.05
4.20
6.05
17.93
6.36
6.29
4.58
6.41
18.97
b
5.61
6.06
4.13
6.00
17.77
6.36
6.41
4.60
6.41
18.88
b
5.58
5.81
5.40
6.01
23.05
6.10
5.91
5.73
6.19
23.94
b
5.62
5.85
5.42
6.09
23.26
6.20
5.97
5.77
6.22
24.16
b
0±2
Yes
Satisfaction with distribution
SAT1
5.42
SAT2
4.14 c
SAT3
5.53 b
SAT4 d
6.16 b
Combo
18.19 b
service
5.31
4.88
5.16
5.85
17.05
5.57
5.39
5.77
5.96
18.60
Repurchase intentions
REP1
6.00 b
REP2
6.23 c
REP3
4.54 b
REP4
6.21 b
Combo
18.47 b
5.60
6.02
3.84
5.94
17.47
6.35
6.42
4.32
6.32
18.52
Relationship
commitment
COM1
5.86
COM2
5.89
COM3
5.52
COM4
6.16
Combo
23.47
5.59
5.82
5.47
6.08
23.44
6.50
6.13
5.89
6.63
25.14
a
b
c
d
b
b
b
b
b
b
c
c
b
b
b
b
b
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates signi®cant dierences between means at 0.10.
Indicates reverse scoring.
b
b
b
c
c
b
b
b
None
b
b
b
b
b
b
b
b
c
c
5.37
4.91
5.19
6.28
17.10
5.45
6.00
3.74
5.83
17.20
5.51
5.85
5.37
5.92
23.20
132
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
accounts had signi®cantly higher scores on eight of 15 attitudinal items when compared to vendors whose senior managers did not visit low volume accounts.
Finally, to assess the potential impact of multiple contact behaviors, low volume accounts
receiving either two or three types of contact behavior were compared to low volume accounts
where vendors made no contact. On ten of the 15 attitudinal items, low volume accounts receiving
multiple contacts rated vendors signi®cantly higher than low volume accounts where vendors did
not make contact.
Based upon these results, low volume vendors with high contact behaviors appear to generate
higher satisfaction, repurchase intentions, and commitment than low volume vendors with low
contact behaviors. These results lend additional credence to the premise that contact behaviors
positively in¯uence customers' perceptions of satisfaction and loyalty toward vendors. The differences do not appear to be merely a function of high volume, i.e., big accounts get more attention and, therefore, are ``happier''. When only low volume or smaller accounts were examined,
dierences in attitudes (satisfaction, repurchase intentions, and commitment) related to vendor
contact behavior were revealed.
In sum, the current research suggests that there are signi®cant positive relationships between
meeting frequency and overall perceptions of customer satisfaction and repurchase intentions. In
addition, formalized contact and personal visits by senior management were found to signi®cantly
impact overall perceptions of customer satisfaction and loyalty.
5. Conclusions and implications
The research focused on the importance of voice of the customer ± listening to and proactively
seeking input from customers. Three methods of listening to customers ± vendor meetings with
customers, formalized contact through the solicitation of feedback and/or conducting surveys,
and personal visits by senior vendor managers ± were examined.
Frequency of meetings was theorized to be positively associated with customer satisfaction.
Frequency of meetings was also expected to be associated with customer loyalty. The results
support these contentions although there was a somewhat surprising twist. Speci®cally, in two
instances, the respondents indicated signi®cantly higher levels of customer satisfaction with distribution service relating to vendors that hold four or more meetings per year with customers and
the vendors who do not hold customer meetings than their satisfaction levels with vendors making
1±3 visits per year. It is dicult to understand why either no meetings or four or more would, in
eect, be preferable to 1±3 meetings per year.
Solicitation of formal feedback and conducting customer surveys appear to be appropriate
methods for gathering relevant input. Strong relationships were found between satisfaction and
the formal collection of customer feedback as well as between loyalty and the formal collection of
customer feedback. Rather than waiting for unsolicited feedback and the inevitable complaints
associated with problems, vendors are advised to routinely seek customer input as a means of
avoiding problems and collaborating on service enhancements.
The level of contact, i.e., the job title of contact person, also appears to be an important
component of building satisfaction and loyalty. Personal visits by senior managers make a good
impression. Customers may be ¯attered with the attention from senior managers. Also, they are
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
133
likely to believe there will be ``follow through'' because senior managers have the clout to handle
account-related decisions and make adjustments as necessary.
In general, the research provides strong support for seeking the voice of the customer. Meeting
frequency, formalized vendor contact, and personal visits from senior managers were all found to
relate to the two constructs ± customer satisfaction and customer loyalty. With respect to loyalty,
a stronger relationship was found between customer contacts and repurchase intentions than
between customer contacts and relationship commitment. The respondents may not be willing to
acknowledge commitment to the vendors, but they intend to keep buying.
The current research provides empirical support for the development of programs/policies
aimed at actively soliciting input from customers. A range of methods were examined; however,
the study does not allow the assessment or evaluation as to which type of ``listening'' is best.
Generally, it is recommended that multiple research approaches to collecting input from customers be used (Berry and Parasuraman, 1997). Future research should focus on assessing the
relative value of various methods for gaining customer input such as vendor meetings, visits from
senior managers, and surveys.
The research centered only on quanti®able components of customer contact ± do vendors make
contact, what kind, and how often. No attempt was made to gauge the quality of the contacts.
Intuitively, it seems likely that not all customer contacts are created equal. Sheer number of
contacts alone cannot be counted on to engender satisfaction and/or loyalty from customers.
Future research looking at the types of contact, content/subject areas covered, etc. is likely to
provide greater insights into the potential to be gained from allocating time and resources to
actively gathering customer input. One area of particular interest would be to examine allocation
of time during meetings/visits (or space allocation in survey instruments). For example, examination of the importance of time spent dealing with problems versus time spent jointly planning
and developing innovative strategic approaches could provide guidance for managing contacts.
Finally, a caveat should be added. While personal contact and listening to customers is important, it should be acknowledged that although manufacturers in the personal products industry face considerable competition they also enjoy a certain level of consumer loyalty. For some
brands, the retailers are forced to carry the products. While personalized contact regarding distribution service can help to cement the relationship, store-level demand dictates brands carried
and it would be dicult to drop successful products regardless of contact activity/service, particularly in consumer product markets. However, the objective of contact activities ± as evidenced
by Proctor and Gamble's cohort of representatives permanently stationed at Wal-Mart's headquarters in Bentonville, Arkansas ± is to further increase the volume of product sold by ensuring
that customers' potential requirements are clearly understood and actioned.
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Customer satisfaction and loyalty in supply chain: the role of
communication
Alexander E. Ellinger
a
a,*
, Patricia J. Daugherty b, Quentin J. Plair
c
Villanova University, College of Commerce and Finance, Department of Marketing, 800 Lancaster Avenue, Villanova,
PA 19085-1678, USA
b
The University of Oklahoma, Division of Marketing, 307 West Brooks, Room 1, Norman, OK 73019-0450, USA
c
Pepsi Cola, 1201 Dowry Drive, Lawrenceville, GA 30244, USA
Received 18 September 1997; received in revised form 15 May 1998; accepted 18 December 1998
Abstract
Communication between buyers and sellers is central to the supply chain philosophy. Further, the trend
toward more detailed customer demands has made it even more important for ®rms to solicit input and
feedback from their customers in order to better tailor their oerings to customer needs. Previous research
suggests a strong linkage between customer satisfaction and customer loyalty. Highly satis®ed customers
are more loyal than less satis®ed customers. Thus, it was hypothesized that ®rms proactively seeking information from customers should realize a ``pay o'' in terms of more satis®ed and, subsequently, more
loyal customers. A survey of buyers in the personal products industry was used to examine three methods of
listening to customers. Frequency of vendor meetings with customers, formalized contact through the
solicitation of feedback and/or conducting surveys, and personal visits by senior vendor managers were
found to be related to customer satisfaction as well as customer loyalty. Ó 1999 Elsevier Science Ltd. All
rights reserved.
1. Introduction
Many world-class ®rms have adopted a supply chain perspective in recent years. Such a
business philosophy requires that trading partners ``jointly plan, execute, and co-ordinate logistical performance'' (Bowersox, 1991). Sharing of information and plans provides the potential to
make channels more ecient and competitive (Closs et al., 1997; Daugherty et al., 1996; Ellram
and Cooper, 1990; Gopal and Cypress, 1993). Thus, in recent years, many sellers have placed
increased emphasis on listening to their customers in order to tailor their product and service
*
Corresponding author. Tel.: +1 610 519 6055; fax: +1 610 519 5364; e-mail: [email protected]
1366-5545/99/$ ± see front matter Ó 1999 Elsevier Science Ltd. All rights reserved.
PII: S 1 3 6 6 - 5 5 4 5 ( 9 9 ) 0 0 0 0 6 - X
122
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
oerings to the customers' needs. Within the customer satisfaction literature, this is referred to as
``voice of the customer''. Listening to customers (and, subsequently, responding to their desires/
requests) should have a ``pay o'' in terms of more satis®ed and more loyal customers. Does it?
The following sections present an overview and results of a recent survey addressing those issues.
2. Voice of the customer
Customer satisfaction involves keeping customers happy both in day-to-day interactions and
from a more global, long-term perspective (Hunt, 1977; Johnson and Fornell, 1991). Competitive
pressures mandate that ®rms identify customer requirements and develop strategies that allow
them to meet or beat the service levels provided by other vendors (Verwijmeren et al., 1996).
Such customer-oriented contacts typically focus on determining relevant dimensions of service
and/or products as well as an assessment of the customers' perceptions of how well the selling ®rm
is doing in meeting those expectations (Sterling and Lambert, 1987). Excessive problems frequently translate to customer defections. However, it is less clear if the reverse is true. Is greater
customer contact related to customer loyalty?
Loyalty has been de®ned as a long-term commitment to repurchase involving both repeated
patronage and a favorable attitude (Dick and Basu, 1994). The development, maintenance, and
enhancement of customer loyalty represents a fundamental marketing strategy for attaining
competitive advantage (Gould, 1995; Kotler, 1988; Reichheld, 1993). The current research addresses that issue by examining the two dimensions of customer loyalty ± repurchase intentions
(repeat patronage) and commitment to the relationship (favorable attitude).
Repurchase intentions encompass the customer's perceptions of continuity expectations such as
relationship renewal (Kumar et al., 1995) and the customer's willingness to recommend the
supplier to a successor (Cronin and Morris, 1992). Commitment exists only when the relationship
is considered important, when a committed partner wants the relationship to continue inde®nitely, and when the partner is prepared to work at preserving it (Morgan and Hunt, 1994).
Indications of relationship commitment include sharing of con®dential information, intentions to
allocate future investments in the relationship, and level of assets and/or resources already
committed to the relationship (Gundlach et al., 1995).
The focus of the research is on one key component of business ± distribution service. The actual
delivery of the product (or service) is critical to achieving customer satisfaction/success (Sterling
and Lambert, 1989). While a number of customer employees are usually involved in purchase
decisions, few could argue the critical in¯uence of one group ± buyers. Therefore, buyers were
surveyed regarding distribution service provided by key vendors within their industry. Based upon
the premise that communication (between buyers and sellers) should in¯uence customer satisfaction as well as customer loyalty, the research sought answers to the following questions:
Q. 1(a) ± Is frequency of meeting with vendor distribution personnel related to customer satisfaction?
Q. 1(b) ± Is frequency of meeting with vendor distribution personnel related to customer loyalty?
Q. 2(a) ± Is regular, formalized vendor contact related to customer satisfaction?
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
123
Q. 2(b) ± Is regular, formalized vendor contact related to customer loyalty?
Q. 3(a) ± Are personal visits by vendors' senior managers related to customer satisfaction?
Q. 3(b) ± Are personal visits by vendors' senior managers related to customer loyalty?
3. Research setting and methodology
The research was sponsored by a leading US manufacturer of personal products interested in
examining industry-speci®c dimensions of customer satisfaction. Initial research eorts focused on
in-depth interviews with the manufacturer's employees (account representatives, customer service
personnel, and a person from the credit area) and customers (buyers and distribution personnel).
A total of 15 telephone interviews were completed. The interviews each lasted approximately 20
min. Information obtained during the interviews helped to identify relevant dimensions of distribution service. The information was subsequently used to develop a six-page survey.
A list of 230 customers' names and phone numbers was provided by the sponsor. Contact was
made with 200 buyers; 30 were unreachable. Of the 200 buyers contacted, 180 agreed to participate or asked to review the questionnaire before committing. The potential respondents were
given the option of receiving the questionnaire by mail or FAX. Nearly three-quarters asked to
have the survey FAXed. Following distribution, 99 usable surveys were returned (43% response
rate).
Non-response bias was tested by comparing the last quarter of the respondent base (those
considered to be most similar to non-respondents) to earlier responses (Armstrong and Overton,
1977; Lambert and Harrington, 1990). Examination of relevant variables indicated that non-response bias was not an issue.
The survey instrument included questions on demographic information. Mean responses indicate that respondents, i.e., buyers, had responsibility for purchasing for 659 stores involving 313
product lines and 6425 SKU's. Mean annual corporate sales per respondent ®rm were slightly
over $2.4 billion. On average, the respondents' ®rms operated 3.5 distribution centers.
3.1. Frequency of meeting
Question 1(a) addresses the relationship between frequency of meeting with distribution service
personnel and overall customer satisfaction. More meetings with customers can enable suppliers
to solicit the detailed and timely input necessary to ensure that eorts are concentrated on areas
that are of particular importance to the customers. Focusing on key service areas has the potential
to increase levels of overall customer satisfaction.
The buyers were asked, ``On average, how many times per year do you meet with vendor
distribution personnel?'' Respondents answered for each of the six vendors (or for each of the
vendors they work with). The six manufacturers were identi®ed in the questionnaire; however, the
data are considered proprietary and the sponsoring ®rm has asked that the competitor set examined not be identi®ed.
Responses were divided into three groups: Group 1 includes the evaluations of vendors who
never meet with customers; Group 2 includes evaluations of vendors meeting with customers 1±3
times per year; and Group 3 includes evaluations of vendors meeting with customers four or more
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A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
times per year. These levels were chosen based upon the rationale that no meetings or only a few
meetings with customers may be perceived by customers as a sign of minimal commitment. Accordingly, four meetings or greater was considered appropriate as the third category. Pre-survey
interviews with the sponsoring ®rm's employees and customers had indicated the importance of
meeting with customers at least once per quarter.
Question 1(b) examines the relationship between frequency of meeting with distribution service
personnel and the two dimensions of loyalty ± repurchase intentions and relationship commitment. Greater familiarity with customer operations and requirements ± the product of more
frequent meetings ± may help vendor distribution personnel to evaluate additional opportunities
for identifying product/service enhancements. For example, more frequent meetings can suggest
service areas where vendors can be of assistance or identify merchandising opportunities. Such
constructive presence may encourage customers to buy more product. In addition, frequent
meetings between vendor distribution personnel and customers may be viewed as an indication
that both parties are committed to working to preserve the relationship.
3.2. Formalized contact
Manufacturing ®rms may not have the resources or the inclination to hold frequent meetings
with all of their customers. Geographical separations and the amount of business involved are
factors which can preclude regular face-to-face meetings between vendor distribution personnel
and their ®rm's customers. Where frequent face-to-face meetings are not feasible, the solicitation
of regular formal feedback by mail or telephone survey is an alternative method of gathering
information and feedback. The current research anticipated that such formalized contact would
positively impact customer satisfaction and customer loyalty. Questions 2(a) and (b) address the
relationship between regular, formalized vendor contact and the two previously discussed areas of
interest, overall customer satisfaction and customer loyalty.
The buyers were asked, ``Do these vendors regularly ask for formal feedback or conduct surveys of distribution service?'' Yes/no response categories were provided.
3.3. Senior management visits
Many ®rms rely upon senior management visits with customers to obtain valuable input and
feedback. High level executives have the authority to realign their own ®rms' operations in order
to be responsive to customer requests. Such initiatives are likely to be noticed by customers. Thus,
personal visits by senior management were expected to in¯uence customer satisfaction and customer loyalty. Questions 3(a) and (b) investigate these suggested associations.
To examine the relationships, the buyers were asked to indicate if their ®rms received personal
visits from senior managers representing the six vendor ®rms examined. As before, yes/no response categories were provided.
3.4. Customer satisfaction
To assess the buyers' overall level of satisfaction, they were asked to indicate how strongly they
agreed or disagreed with statements regarding their overall satisfaction with the distribution
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
125
service provided by each of the vendors. A 7-point scale was used (1 strongly disagree,
4 neutral, and 7 strongly agree). The satisfaction-related statements utilized were: we are
delighted with our overall (distribution service) relationship with them; we wish more of our
suppliers were like this one; it is a pleasure dealing with this supplier; and there is always some
problem or another with this supplier (reverse scored).
3.5. Loyalty
Repurchase intentions were assessed by asking the buyers the extent of their agreement with
four statements: we are likely to increase purchases from this vendor in the next year; we are likely
to decrease purchases from this vendor in the next year; all things being equal (price, product,
quality, etc.), we intend to buy more from this vendor because of their distribution service; and I
would recommend that my successor continue using this vendor.
Information relating to relationship commitment was collected by asking the buyers their
opinions regarding the following statements pertaining to their relationships with the six vendors
under examination: the relationship that my ®rm has with this ®rm is something we are very
committed to; the relationship that my ®rm has is something my ®rm intends to maintain inde®nitely; the relationship that my ®rm has with this vendor deserves our ®rm's maximum eort
to maintain; and, maintaining a long-term relationship with this vendor is very important to this
®rm.
Reliabilities for the satisfaction, repurchase intentions, and relationship commitment scales
were 0.827, 0.659 and 0.876, respectively.
4. Results
The following section presents the results of analyses examining the relationship between
various types of listening to customers and customer satisfaction/loyalty.
4.1. Frequency of meeting
It was expected that more meetings with distribution service personnel would be positively
related to customer satisfaction. Table 1 presents analysis of variance (ANOVA) results.
When comparisons were made between the three groups, signi®cant dierences were found,
although the results were not what was expected. For three of the four overall satisfaction items,
the buyers indicated higher levels of satisfaction for both the vendors meeting four or more times
per year and the vendors not meeting with customers at all than for the vendors meeting with
customers 1±3 times per year. Signi®cant dierences were found for: we are delighted with our
overall (distribution service) relationship with them; it is a pleasure dealing with this supplier; and
there is always some problem or another with this supplier. No signi®cant dierence was found
between groups for the remaining statement, ``we wish more of our suppliers were like this one''.
However, when all four items were summed into a single combination measure of overall
customer satisfaction, the vendors that met with their customers four or more times per year had
signi®cantly higher levels of overall customer satisfaction than both the other groups. As pro-
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A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Table 1
Customer satisfaction ratings by frequency of meetings (One-way ANOVA tests of dierences in means a )
Satisfaction with distribution service
We are delighted with our overall (distribution
service) relationship with them (SAT1)
We wish more of our suppliers were like this
one (SAT2)
It is a pleasure dealing with this supplier (SAT3)
There is always some problem or another with
this supplier (SAT4) c
Combination measure
a
b
c
Meetings with vendor distribution personnel
0
1±3
Mean (s.d.)
Mean (s.d.) Mean (s.d.)
5.39
b
(1.38) 4.95 (1.35)
5.03 (1.62)
5.35
2.05
b
b
4.86 (1.56)
(1.56) 4.85 (1.55)
(1.18) 2.39 (1.13)
17.61 (4.10)
4 or more
5.42
b
4.08 (510)
0.017
5.09 (1.70)
0.61 (506)
0.541
b
5.23 (517)
2.98 (517)
0.006
0.051
3.21 (489)
0.041
5.45
2.27
b
(1.34)
F-ratio (d.f.) P-value
(1.47)
(1.12)
17.06 (4.02) 18.22 b (3.74)
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
posed, the research provides at least partial support for the existence of a positive relationship
between frequency of meeting with distribution service personnel and customer satisfaction.
Table 2 presents analysis of variance (ANOVA) results for each of the two dimensions of
loyalty.
It was expected that more meetings with distribution service personnel would be positively
related to repurchase intentions. When comparisons were made between the three groups, signi®cant dierences were found, although, once again, the results were not what was anticipated.
As expected, the vendors meeting with customers four or more times per year generated signi®cantly higher agreement with the statement, ``we are likely to increase purchases from the vendor
in the next year'', than the vendors meeting 1±3 times per year and the vendors that did not meet
with customers at all. For the statement, ``all things being equal (price, product, quality, etc.), we
intend to buy more from this vendor because of their distribution service'', the vendors meeting
four or more times and the vendors meeting 1±3 times per year both had signi®cantly higher
repurchase intentions than the vendors that did not meet with customers at all. There was no
signi®cant dierence between the three groups on the remaining two repurchase intentions items:
we are likely to decrease purchases from this vendor in the next year, and I would recommend that
my successor continue using this vendor.
As with overall customer satisfaction, when all four items were aggregated into a single combination measure of overall repurchase intentions, the vendors that met with their customers four
or more times per year had signi®cantly higher levels of repurchase intentions than the other
groups. Therefore, a positive relationship between frequency of meeting with distribution service
personnel and repurchase intentions was supported.
It had been predicted that more meetings with distribution service personnel would be positively related to relationship commitment. However, when comparisons were made between the
three groups, no signi®cant dierences were found for any of the four individual relationship
commitment items, or for the single combination measure of relationship commitment comprising
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A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Table 2
Customer loyalty ratings by frequency of meetings (One-way ANOVA tests of dierences in means a )
Meetings with vendor distribution personnel
0 meetings
1±3 meetings 4 or more meetings F-ratio (d.f.) P-value
Mean (s.d.) Mean (s.d.)
Repurchase intentions
We are likely to increase purchases from
this vendor in the next year (REP1)
We are likely to decrease purchases from
this vendor in the next year (REP2) c
All things being equal (price, product,
quality, etc.), we intend to buy more from
this vendor because of their distribution
service (REP3)
I would recommend that my successor
continue using this vendor (REP4)
Combination measure
Relationship commitment
The relationship that my ®rm has with
this ®rm is something we are very
committed to (COM1)
The relationship that my ®rm has with
this ®rm is something my ®rm intends
to maintain inde®nitely (COM2)
The relationship that my ®rm has with
this vendor deserves our ®rm's maximum
eort to maintain (COM3)
Maintaining a long term relationship with
this vendor is very important to my ®rm
(COM4)
Combination measure
a
b
c
Mean (s.d.)
0.037
2.11 (1.26)
0.06 (513)
0.944
b
6.07 (504)
0.003
6.12 (1.17)
0.53 (505)
0.588
b
4.20 (489)
0.016
5.58 (1.33)
5.86
2.11 (1.32)
2.06 (1.30)
3.91 (1.56)
4.39
6.02 (1.25)
6.18 (1.26)
b
(1.55)
17.68 (2.64) 18.21 (2.72)
b
3.31 (516)
5.54 (1.46)
4.48
18.53
(1.28)
(1.78)
(2.89)
5.76 (1.44)
5.62 (1.34)
5.81 (1.24)
0.70 (522)
0.499
5.88 (1.31)
5.76 (1.41)
5.77 (1.43)
0.32 (510)
0.726
5.56 (1.49)
5.46 (1.44)
5.53 (1.43)
0.15 (522)
0.862
6.10 (1.28)
6.04 (1.21)
6.10 (1.10)
0.10 (521)
0.901
23.54 (4.50) 22.93 (4.53)
23.23 (4.44)
0.54 (508)
0.581
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
all four items. The current research failed to support a positive relationship between frequency of
meeting with vendor distribution personnel and relationship commitment.
4.2. Formalized contact
T-tests were used to identify dierences between the two groups: those formally requesting
feedback from their customers and those that do not solicit feedback with respect to distribution
service performance. The results for the association between formalized vendor contact and
overall customer satisfaction are shown in Table 3.
As anticipated, the buyers indicated signi®cantly higher satisfaction with the group that requested formal feedback from their customers than with the group that did not do so. Signi®cant
128
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Table 3
Customer satisfaction by formalized vendor contact (T-tests of dierences in means for customer satisfaction a )
Satisfaction with distribution service
Regular, formalized visits
Yes
We are delighted with our overall (distribution service) relationship with them (SAT1)
We wish more of our suppliers were like this one (SAT2)
It is a pleasure dealing with this supplier (SAT3)
There is always some problem or another with this supplier(SAT4) d
Combination measure
a
b
c
d
No
5.46
5.31
5.54
2.17
c
18.42
b
b
b
5.30
4.94
5.25
2.23
17.66
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates signi®cant dierences between means at 0.10.
Indicates reverse scoring.
dierences between groups were found on three of the four individual satisfaction items: we are
delighted with our overall (distribution service) relationship with them; we wish more of our
suppliers were like this one; and it is a pleasure dealing with this supplier. There was no signi®cant
dierence between groups on the ®nal satisfaction item: there is always some problem or another
with this supplier. Further, the ratings for the vendors soliciting formal feedback from customers
were signi®cantly higher in terms of overall satisfaction, i.e., on the single combination measure of
overall satisfaction comprising of all four items. Thus, the research supported a positive association between formalized vendor contact and overall customer satisfaction.
Positive relationships between formalized vendor contact and the two dimensions of loyalty
were also anticipated. Results of T-tests performed to examine the relationships are presented in
Table 4. The group that solicited formal feedback from customers had signi®cantly higher repurchase intentions ratings than the group not formally soliciting feedback, on three of the four
individual items: we are likely to increase purchases from this vendor in the next year; we are likely
to decrease purchases from this vendor in the next year; and all things being equal (price, product,
quality, etc.), we intend to buy more from this vendor because of their distribution service, as well
as on the single combination measure for overall repurchase intentions. There was no signi®cant
dierence between the two groups on the fourth item: I would recommend that my successor
continue using this vendor.
Similarly, the group of vendors that solicited formal feedback from customers generated signi®cantly higher relationship commitment than the group of vendors who did not, on all four
individual items, as well as on the single combination measure of overall relationship commitment. Thus, positive associations between formalized vendor contact and both dimensions of
loyalty were con®rmed by the research.
4.3. Senior management visits
Two groups were formed for analysis purposes: those vendors where senior managers made
personal visits to customers, and those vendors where they did not. T-tests were used to test for
dierences between the two groups; results are presented in Tables 5 and 6.
129
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Table 4
Customer loyalty by formalized vendor contact (T-tests of dierences in means for customer loyalty a )
Regular, formalized visits
Yes
Repurchase intentions
We are likely to increase purchases from this vendor in the next year (REP1)
We are likely to decrease purchases from this vendor in the next year(REP2) c
All things being equal (price, product, quality, etc.), we intend to buy more from
this vendor because of their distribution service (REP3)
I would recommend that my successor continue using this vendor (REP4)
Combination measure
Relationship commitment
The relationship that my ®rm has with this ®rm is something we are very committed
to (COM1)
The relationship that my ®rm has with this ®rm is something my ®rm intends to
maintain inde®nitely (COM2)
The relationship that my ®rm has with this vendor deserves our ®rm's maximum
eort to maintain (COM3)
Maintaining a long term relationship with this vendor is very important to my ®rm
(COM4)
Combination measure
a
b
c
6.10
1.92
4.60
No
b
5.57
2.18
4.18
b
b
6.19
6.07
18.79
b
18.00
6.19
b
5.63
5.98
b
5.75
5.84
b
5.42
6.33
b
6.00
24.34
b
22.92
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
Vendors whose senior managers personally visited customers generated signi®cantly higher
perceptions of overall satisfaction and loyalty than the vendors whose senior managers did not
make personal visits to customers. Firms whose senior management conducted customer visits
were rated signi®cantly higher on three of the four individual satisfaction items: we wish more of
our suppliers were like this one; it is a pleasure dealing with this supplier; and there is always some
problem or another with this supplier, as well as on the single combination measure for overall
Table 5
Customer satisfaction by senior management visits (T-tests of dierences in means for customer satisfaction a )
Satisfaction with distribution service
Senior management visits
Yes
We are delighted with our overall (distribution service) relationship with them (SAT1)
We wish more of our suppliers were like this one (SAT2)
It is a pleasure dealing with this supplier (SAT3)
There is always some problem or another with this supplier (SAT4) c
Combination measure
a
b
c
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
5.42
5.42
5.59
2.06
18.51
No
b
b
b
b
5.28
4.84
5.18
2.31
17.52
130
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Table 6
Customer loyalty by senior management visits (T-tests of dierences in means for customer loyalty a )
Senior management visits
Yes
Repurchase intentions
We are likely to increase purchases from this vendor in the next year (REP1)
We are likely to decrease purchases from this vendor in the next year(REP2) c
All things being equal (price, product, quality, etc.), we intend to buy more from
this vendor because of their distribution service (REP3)
I would recommend that my successor continue using this vendor (REP4)
Combination measure
Relationship commitment
The relationship that my ®rm has with this ®rm is something we are very committed
to (COM1)
The relationship that my ®rm has with this ®rm is something my ®rm intends to
maintain inde®nitely (COM2)
The relationship that my ®rm has with this vendor deserves our ®rm's maximum
eort to maintain (COM3)
Maintaining a long term relationship with this vendor is very important to my ®rm
(COM4)
Combination measure
a
b
c
No
6.17
1.96
4.55
b
6.43
b
5.94
19.05
b
17.79
6.11
b
5.60
6.05
b
5.67
5.84
b
5.36
6.22
b
6.00
24.22
b
22.74
b
b
5.47
2.22
4.13
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates reverse scoring.
satisfaction. There was no signi®cant dierence between groups for the ®nal satisfaction item: we
are delighted with our overall (distribution service) relationship with them.
In addition, vendors whose senior management conducted customer visits had signi®cantly
higher ratings on all of the individual loyalty items, as well as on the single combination measures
for repurchase intentions and relationship commitment. Therefore, the anticipated positive relationships between personal visits by senior management, and overall customer satisfaction and
customer loyalty, were con®rmed by this study.
4.4. Analysis of low volume accounts
To further examine the veracity of the causal links implied by the current research, additional
analyses were undertaken. Intuitively, transaction volume may also in¯uence associations between
contact behavior and attitude. For example, high volume accounts involve repeat business and,
therefore, are likely to generate the most visits. Thus, vendors were divided into high and low
volume accounts based upon information supplied by the sponsoring company. As expected,
signi®cant dierences (at the 0.05 level) were found between high and low volume accounts for
formal feedback and senior management visits. There was no signi®cant dierence between high
and low volume accounts for number of visits. These results suggest that volume does in¯uence
contact activity.
131
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
Next, to better assess the potential impact of contact behavior, analysis was focused on only
low volume accounts. This allowed comparisons of accounts equal in terms of current volume, but
dierent in terms of level of contact. Low volume accounts were compared on satisfaction, repurchase intentions, and relationship commitment for each of the three individual types of contact
behavior. In addition, contact pro®le types were created for low volume accounts and comparisons on attitude were made between low volume accounts who received none of the three types of
contact behavior and low volume accounts who received either two or three of the three types of
contact behavior. Results for the T-tests of dierences between groups are presented in Table 7.
To summarize the results, low volume accounts who were visited three or more times per year
by vendors had signi®cantly (at 0.05 level) more favorable attitudes toward the vendors on 8 of 15
items than low volume accounts who were visited 0 to 2 times a year by vendors. Similarly,
vendors who requested formal feedback from low volume accounts generated signi®cantly higher
scores on ten of 15 attitudinal items than vendors who did not request formal feedback from low
volume accounts. It was also found that vendors whose senior management visited low volume
Table 7
Low volume accounts: dierences in individual contact behaviors (T-tests of dierences in means a )
Item
Regular, formalized
visits
Formal feedback
Senior management
visits
Contact behaviors
3 or more
No
Yes
No
2 or 3
5.33
4.92
5.27
6.0
17.48
5.52
5.55
5.73
6.12
18.68
5.34
4.86
5.27
5.94
17.45
5.55
5.55
5.74
6.09
18.77
5.68
6.05
4.20
6.05
17.93
6.36
6.29
4.58
6.41
18.97
b
5.61
6.06
4.13
6.00
17.77
6.36
6.41
4.60
6.41
18.88
b
5.58
5.81
5.40
6.01
23.05
6.10
5.91
5.73
6.19
23.94
b
5.62
5.85
5.42
6.09
23.26
6.20
5.97
5.77
6.22
24.16
b
0±2
Yes
Satisfaction with distribution
SAT1
5.42
SAT2
4.14 c
SAT3
5.53 b
SAT4 d
6.16 b
Combo
18.19 b
service
5.31
4.88
5.16
5.85
17.05
5.57
5.39
5.77
5.96
18.60
Repurchase intentions
REP1
6.00 b
REP2
6.23 c
REP3
4.54 b
REP4
6.21 b
Combo
18.47 b
5.60
6.02
3.84
5.94
17.47
6.35
6.42
4.32
6.32
18.52
Relationship
commitment
COM1
5.86
COM2
5.89
COM3
5.52
COM4
6.16
Combo
23.47
5.59
5.82
5.47
6.08
23.44
6.50
6.13
5.89
6.63
25.14
a
b
c
d
b
b
b
b
b
b
c
c
b
b
b
b
b
7-point scale: 1 strongly disagree; 7 strongly agree.
Indicates signi®cant dierences between means at 0.05.
Indicates signi®cant dierences between means at 0.10.
Indicates reverse scoring.
b
b
b
c
c
b
b
b
None
b
b
b
b
b
b
b
b
c
c
5.37
4.91
5.19
6.28
17.10
5.45
6.00
3.74
5.83
17.20
5.51
5.85
5.37
5.92
23.20
132
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
accounts had signi®cantly higher scores on eight of 15 attitudinal items when compared to vendors whose senior managers did not visit low volume accounts.
Finally, to assess the potential impact of multiple contact behaviors, low volume accounts
receiving either two or three types of contact behavior were compared to low volume accounts
where vendors made no contact. On ten of the 15 attitudinal items, low volume accounts receiving
multiple contacts rated vendors signi®cantly higher than low volume accounts where vendors did
not make contact.
Based upon these results, low volume vendors with high contact behaviors appear to generate
higher satisfaction, repurchase intentions, and commitment than low volume vendors with low
contact behaviors. These results lend additional credence to the premise that contact behaviors
positively in¯uence customers' perceptions of satisfaction and loyalty toward vendors. The differences do not appear to be merely a function of high volume, i.e., big accounts get more attention and, therefore, are ``happier''. When only low volume or smaller accounts were examined,
dierences in attitudes (satisfaction, repurchase intentions, and commitment) related to vendor
contact behavior were revealed.
In sum, the current research suggests that there are signi®cant positive relationships between
meeting frequency and overall perceptions of customer satisfaction and repurchase intentions. In
addition, formalized contact and personal visits by senior management were found to signi®cantly
impact overall perceptions of customer satisfaction and loyalty.
5. Conclusions and implications
The research focused on the importance of voice of the customer ± listening to and proactively
seeking input from customers. Three methods of listening to customers ± vendor meetings with
customers, formalized contact through the solicitation of feedback and/or conducting surveys,
and personal visits by senior vendor managers ± were examined.
Frequency of meetings was theorized to be positively associated with customer satisfaction.
Frequency of meetings was also expected to be associated with customer loyalty. The results
support these contentions although there was a somewhat surprising twist. Speci®cally, in two
instances, the respondents indicated signi®cantly higher levels of customer satisfaction with distribution service relating to vendors that hold four or more meetings per year with customers and
the vendors who do not hold customer meetings than their satisfaction levels with vendors making
1±3 visits per year. It is dicult to understand why either no meetings or four or more would, in
eect, be preferable to 1±3 meetings per year.
Solicitation of formal feedback and conducting customer surveys appear to be appropriate
methods for gathering relevant input. Strong relationships were found between satisfaction and
the formal collection of customer feedback as well as between loyalty and the formal collection of
customer feedback. Rather than waiting for unsolicited feedback and the inevitable complaints
associated with problems, vendors are advised to routinely seek customer input as a means of
avoiding problems and collaborating on service enhancements.
The level of contact, i.e., the job title of contact person, also appears to be an important
component of building satisfaction and loyalty. Personal visits by senior managers make a good
impression. Customers may be ¯attered with the attention from senior managers. Also, they are
A.E. Ellinger et al. / Transportation Research Part E 35 (1999) 121±134
133
likely to believe there will be ``follow through'' because senior managers have the clout to handle
account-related decisions and make adjustments as necessary.
In general, the research provides strong support for seeking the voice of the customer. Meeting
frequency, formalized vendor contact, and personal visits from senior managers were all found to
relate to the two constructs ± customer satisfaction and customer loyalty. With respect to loyalty,
a stronger relationship was found between customer contacts and repurchase intentions than
between customer contacts and relationship commitment. The respondents may not be willing to
acknowledge commitment to the vendors, but they intend to keep buying.
The current research provides empirical support for the development of programs/policies
aimed at actively soliciting input from customers. A range of methods were examined; however,
the study does not allow the assessment or evaluation as to which type of ``listening'' is best.
Generally, it is recommended that multiple research approaches to collecting input from customers be used (Berry and Parasuraman, 1997). Future research should focus on assessing the
relative value of various methods for gaining customer input such as vendor meetings, visits from
senior managers, and surveys.
The research centered only on quanti®able components of customer contact ± do vendors make
contact, what kind, and how often. No attempt was made to gauge the quality of the contacts.
Intuitively, it seems likely that not all customer contacts are created equal. Sheer number of
contacts alone cannot be counted on to engender satisfaction and/or loyalty from customers.
Future research looking at the types of contact, content/subject areas covered, etc. is likely to
provide greater insights into the potential to be gained from allocating time and resources to
actively gathering customer input. One area of particular interest would be to examine allocation
of time during meetings/visits (or space allocation in survey instruments). For example, examination of the importance of time spent dealing with problems versus time spent jointly planning
and developing innovative strategic approaches could provide guidance for managing contacts.
Finally, a caveat should be added. While personal contact and listening to customers is important, it should be acknowledged that although manufacturers in the personal products industry face considerable competition they also enjoy a certain level of consumer loyalty. For some
brands, the retailers are forced to carry the products. While personalized contact regarding distribution service can help to cement the relationship, store-level demand dictates brands carried
and it would be dicult to drop successful products regardless of contact activity/service, particularly in consumer product markets. However, the objective of contact activities ± as evidenced
by Proctor and Gamble's cohort of representatives permanently stationed at Wal-Mart's headquarters in Bentonville, Arkansas ± is to further increase the volume of product sold by ensuring
that customers' potential requirements are clearly understood and actioned.
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