SatisfactionandProduct Usage AffectsCustomer How Service Performance

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How Service Performance

Affects Customer

Satisfaction and Product

Usage

Master Thesis MI/MM F.V.N. Wolterink

S1781200

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Imagine,

 Would higher service performance satisfy you?

 Does higher service performance make you travel more?

 Does day-to-day variability in service performance make you change your mind?

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Research question

Does variability in service performance matter more than average service performance in the effects on customer

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Relevance

 Adds theoretical insights to marketing literature by

focusing not only on average service performance but also on variability in service performance

 Provides managers with insights about the effects of uncertainty of service performance on customer

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Data and methodology

 January 2007 until September 2011, monthly observations of Dutch public transport provider

 VARX: Vector AutoRegressive with eXogenous variables

 Complete picture of dynamics in time series

 Customer satisfaction: robustness check

 Service performance: two measures

 Generalized impulse response functions

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Results

Hypotheses Results Model 1: ΔCS7 and TK Model 2: ΔACS and TK ST MT LT ST MT LT

H₁: Higher average service performance

leads to higher customer satisfaction.

s s s s s s

H₂: Higher average service performance

leads to higher product usage.

-H₃: Variability in service performance leads

to lower customer satisfaction.

-H₄: Variability in service performance leads

to lower product usage.

s s

-H₅: Higher customer satisfaction leads to

higher product usage.

s*

-H₆: Higher product usage leads to higher

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GFEVD: answering the research

question

Model 1: ΔCS7 Model 1: TK

Month ΔCS7 ASPC VSPC TK ΔCS7 ASPC VSPC TK

1 100.00% 0.00% 0.00% 0.00% 3.79% 0.11% 1.28% 94.82%

3 92.87% 3.13% 1.11% 2.89% 7.25% 18.79% 1.14% 72.82%

12 92.85% 3.14% 1.12% 2.89% 7.25% 18.81% 1.16% 72.78%

Does variability in service performance matter more than average service performance in the effects on customer

satisfaction and product usage?

Model 2: ΔACS Model 2: TK

Month ΔACS ASPC VSPC TK ΔACS ASPC VSPC TK

1 100,00% 0,00% 0,00% 0,00% 5,92% 0,05% 0,91% 93,12%

3 93,71% 2,68% 0,31% 3,30% 9,13% 18,36% 0,77% 71,74%

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Discussion and implications

 Average service performance only affects customer satisfaction

 Continuous increase in average service performance will keep customers satisfied

 Variability in service performance only affects product usage

 Managing variability is important to retain customers  Individual tracking

 Negative effects of increased product usage on customer satisfaction

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Limitations and further research

suggestions

Limitations

 VARX, overparameterization

 R2 _{is relatively low, no indication of omitted variables}

 Length of data  Data structure

Further research suggestions

 Variability effects might be captured in data that cover more

periods

 Mediation effect: service performance  Customer satisfaction 

Product usage

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