An investigation among B2B customers in the service industry
Marjon Tuin Vechtstraat 27-2 1078 RG Amsterdam Tel: +31 (0) 623806167 E-mail: m.tuin.2@student.rug.nlUniversity of Groningen Newcastle University
Faculty of Economics and Business Business School
Dual Award AIBM&M Dual Award AIBM&M
Supervisor: H. Ritsema Supervisor: N. Heirati
THE RELATION BETWEEN AFTER-SALES CORPORATE
CUSTOMER COMMUNICATION & CUSTOMER SATISFACTION
An investigation among B2B customers in the service industry
Faculty of Economics and Business, University of Groningen, Groningen, The Netherlands Newcastle University Business School, Newcastle University, Newcastle, United Kingdom Keywords: Customer satisfaction, Customer communication, Relational Communication, Corporate communication, Corporate customer communication, B2B, Service industry, Customer expectations, Customer understanding, After-sales, Communication methods, Communication volumes, Complaint management.
Abstract: This research project focuses on the relationship between after-sales corporate communication towards B2B customers and customer satisfaction in the service industry. It shows that after-sales corporate customer communication is influenced by customer
expectations, customer understanding, customisation, communication methods,
communication volume, complaint management, consistency and timing. It is important to know the customer’s expectations and needs in order to create targeted corporate customer communication. It is shown that customers prefer a combination of communication methods, such as face-to-face communication for messages with a large impact or great importance. Email and telephone can be used to precede a face-to-face conversation and to send
messages with less impact and importance. Communication volume differs across customers, but what is most important is that organisations should only use corporate customer
communication when there is relevant and interesting content. What is of utmost importance is that organisations communicate consistently on all levels and keep communicating after sales and when dealing with complaints. For large multinationals it appears that a
ACKNOWLEDGEMENTS
I am using this opportunity to express my appreciation to everyone who supported me throughout this research project. I am thankful for their help, guidance and feedback they provided during the project.
First of all, I would like to thank Mr. Etienne te Brake and Mrs. Kyrsa de Bruine for providing me with the opportunity to develop my research in collaboration with ISS The Netherlands. Besides, I would like to thank all participants that helped with this research, without their help it would have been impossible to complete this research project.
I would also like to thank my University supervisors, Dr Henk Ritsema and Dr Nima Heirati, for their guidance and feedback throughout the project.
Finally, I would like to thank my parents for their unconditional support and trust throughout my studies at university. Without them, I would not have been the person I am today.
TABLE OF CONTENT
ACKNOWLEDGEMENTS 3
2.RESEARCH QUESTIONS 9
3.THEORETICAL BACKGROUND 11
3.1.Corporate customer communication 11
3.1.1.Corporate communication 11
3.1.2.Groups influenced by corporate communication 12
3.1.3.Customer communication 12
3.1.4.After-sales corporate customer communication 16
3.2.Customer satisfaction 16
3.3.Corporate customer communication vs. Customer satisfaction 17
3.3.1.Customer understanding & Customer orientation 17
3.3.2.Customised communication 19
3.3.3.After-sales corporate customer communication & customer satisfaction 20
3.4.Influence of a parent company 21
3.4.1.Challenges for MNEs 21
3.4.2.International strategies 22
3.4.3.Corporate customer communication in an international context 22
3.5.Summary 23
4.METHODOLOGY 24
4.1.Research Design 24
4.1.1.Exploratory vs. descriptive vs. causal 24
4.1.2.Quantitative vs. Qualitative research 25
4.1.3.Qualitative research method 26
4.2.Case Selection 26 4.3.Data Collection 27 4.4.Sample Size 28 4.5.Data Analysis 28 4.6.Ethics 30 4.7.Summary 31 5.RESULTS 31 5.1.Definitions 32 5.1.Definition CCC 32 5.2.Factors influencing CCC 33 5.2.1.Expectations of CCC 33 5.2.2Communication methods 36
5.2.3.Customer communication volume 37
5.2.4.Customer understanding 39
5.2.5.Customisation 41
5.2.6.Partnership 41
5.2.7. Complaint management 43
5.2.8.Consistency & timing 45
5.3.Influence of a parent company 46
5.3.1.ISS Facility Services 46
5.3.2.Interviewee opinions 47
5.4.After-sales corporate customer communication & customer satisfaction 49
6.DISCUSSION 50
6.1.Definitions 50
6.3.Influence of a parent company 53
7.CONCEPTUAL MODEL 54
8.CONCLUSION 56
8.1.Definitions 56
8.2.Factors influencing CCC 56
8.3.Influence of a parent company 58
8.4.Final conclusion 58
9.LIMITATIONS 58
10.IMPLICATIONS FOR ACADEMICS AND MANAGERS 59
REFERENCE LIST 60
APPENDICES 68
Appendix 1 – Interview format customer interviews 68
Appendix 2 – Interview format Director Corporate Development 71
Appendix 3 – Customer list 72
Appendix 4 – Categories + subcategories 73
Appendix 5 – Interview transcript customers 75
CUSTOMER A 75 CUSTOMER B 77 CUSTOMER C 82 CUSTOMER D 86 CUSTOMER E 91 CUSTOMER F 95 CUSTOMER G 98 CUSTOMER H 103 CUSTOMER I 108 CUSTOMER J 113
FIGURES, TABLES & GRAPHS
Figure 1.1. Media Richness Theory 14
Figure 5.1. Definition CCC 32
Figure 7.1. Conceptual model 55
Table 4.1. Data analysis 29
Table 5.1. Expectations of CCC 33
Table 5.2. Communication methods 36
Table 5.3. Customer understanding 39
Table 5.4. Partnership 42
Graph 5.1. Customer communication volume 38
Graph 5.2. Complaint management 44
Graph 5.3. Interviewee opinions 48
1.INTRODUCTION
The relationship between the service encounter and customer satisfaction is the cornerstone of service marketing research (Sparks, Bradley and Callan, 1997; Donovan and Hocutt, 2001; Söderlund and Julander, 2009; Söderlund and Rosengren, 2010). Service encounter represents the customer’s interaction with the service provider, its personnel, physical facilities or other tangible elements of the organisation (Sparks, Bradley and Callan, 1997; Miao, Mattila and Mount, 2001).
An example of previous research projects on this topic is Söderlund and Rosengren (2010) whom investigate the impact of the service worker’s emotions on customer satisfaction. Whereas they focus on the impact of emotions, Kang and Hyun (2012) did research on the most effective communication styles for service employees and Donovan and Hocutt (2001) focused on the degree of customer orientation by service employees. The reason of this particular focus can be found in the fact that service employees frequently operate as a firm representative, reflecting the organisation’s image (Cambra-Fierro, Melero-Polo and Vázquez-Carrasco, 2014). However, there is always a corporate organisation behind a service employee, having an influence in how service employees interact with customers (Van den Hout, 2013; Cambra-Fierro, Melero-Polo and Vázquez-Carrasco, 2014). Despite this, little or no research can be found on the relationship between corporate customer communication and customer satisfaction. Even though this relationship is important for management to gain insight in the extent to which they have a correct perception of the customer’s expectations and needs (Singh and Ranchhod, 2004; Daif, 2013; Van den Hout, 2013). To create a correct view of the customer’s needs, expectations etc. it is important to directly communicate with or to the customer rather than communicating via service personnel (Van den Hout, 2013). Further, the after-sales service and communication is an important factor in generating feedback and information on customer’s expectations (Sing and Ranchhod, 2004; Jones, 2007). According to Sing and Ranchhod (2004) the service and after-sales communication are an important source of revenue of service organisations.
towards B2B customers influences customer satisfaction in a subsidiary in the facility services industry. Following this objective, the following research questions is created:
How does after-sales corporate communication towards B2B customers influences customer satisfaction in a foreign subsidiary in the facility services industry?
The in-depth knowledge on this subject is gathered through an extensive literature review and exploratory qualitative research. Through interviewing managers of a randomly selected customer group of a multinational in the facility services industry and through interviewing a director of the Dutch subsidiary of this multinational, an answer to the main research question is found. The research project is conducted in approximately three months.
2.RESEARCH QUESTIONS
The previous chapter shows the objective and main research question this study focuses on. As an extension of this main research question, several sub-questions are created. These sub-questions are used to find an answer to the main research question.
1. What is the definition of corporate communication? 2. What is the definition of customer communication? 3. What is the definition of customer satisfaction?
4. Which factors influence corporate customer communication?
5. What is the influence of a parent company on a local subsidiary concerning corporate customer communication?
The first three sub-questions are general questions providing a detailed insight in the terms used in the main research question. An extensive review of existing literature is used to answer these questions.
The main research question focuses on how corporate customer communication influences satisfaction. However, corporate customer communication is influenced by various factors, such as how is communicated, the method that is used and how often there is communicated. Besides, customers are likely to have expectations and preferences and the degree to which corporate customer communication meets these expectations and preferences is likely to influence customer satisfaction (Tripathi, 2014;Pareek, 2014). In order to find out how corporate customer communication influences customer satisfaction, it is important to understand what factors influence corporate customer communication and therewith customer satisfaction. An extensive review of relevant literature forms the basis of the answer to this sub-question and the basis of the interview guide used for data collection. The interview guide includes questions focusing on the aspects influencing corporate customer communication as well as questions to gain insight in the customer’s expectations. The combination of the literature review and data collection provides an answer to this sub-question.
order to find out how corporate customer communication influences customer satisfaction in a foreign subsidiary, it is important to know how subsidiaries are influenced by the parent company. Through a review of relevant literature, an answer is found to this question. Besides, the case is investigated by creating an overview of the influence of the parent company of a Dutch subsidiary. Through the combination of the literature review and the data collection, an answer is found to this sub-question.
3.THEORETICAL BACKGROUND
The theoretical background is designed to create an overview of relevant literature about the various factors included in the research question. Through this extensive review an answer is given to the first three sub-questions and a basis for the fourth and fifth research question is created.
3.1.Corporate customer communication
3.1.1.Corporate communication
According to Görkem (2014) corporate communication is an instrument used by an organisation’s management to communicate as effective and efficient as possible with both internal and external stakeholders. Both Toth and Trujillo (1987) and Cornelissen (2004) refer to corporate communication as a management function. They state that an organisation’s goals and character are communicated to a diverse group of stakeholders through this function. Corporate communications focus on how the entire organisation is presented to their internal and external stakeholders; it is the management of all forms of communication in order to create and preserve a positive reputation among all stakeholders (Cornelissen, 2004). Often corporate communication is perceived as e.g. advertising or PR, but in principle all communication of a company’s middle and/or top management is part of corporate communication (Toth and Trujillo, 1987). Cornelissen (2004) adds “that everything a company says, makes or does, leaves an impression with stakeholders”.
3.1.2.Groups influenced by corporate communication 3.1.2.1.Stakeholders
The previous paragraph showed that corporate communication focuses on internal and external stakeholders. The most widely used definition of a stakeholder is the one provided by Freeman (1984:54) stating that stakeholders are “groups and individuals who can affect, or are affected by, the achievement of an organisation’s mission”. Stakeholders include a broad variety of publics, including stockholders, customers, employees, the media and the community (Cornelissen, 2004). However, the relationships with internal stakeholders as managers and employees, business partners as investors or suppliers, and customers are crucial for the existence of an organisation (Park, Chidlow and Choi, 2014). Customers are important in a way that the organisation might lose them if the organisation’s services and behaviour do not meet the customer’s expectations (Park, Chidlow and Choi, 2014).
3.1.2.2.Customers
According to Jones (2007), a customer is someone who buys the products or services of an organisation. However, this is a broadly defined term, which can be narrowed down based on several criteria. First, a division can be made between internal and external customers. External customers are those individuals that are not connected to the organisation in any other way than that they made use of the company’s services (Jones, 2007). Second, the market can be divided in Business-to-Consumer (B2C) and Business-to-Business (B2B) customers, where B2C focuses on individuals purchasing a service for their own use, and B2B on customers using a service on behalf of a business organisation (Jones, 2007). In the B2B sector an organisation deals with the final purchaser as well as the people involved in the decision making process. Who is involved in the decision making process differs per organisation (Jones, 2007).
3.1.3.Customer communication
Zeithaml and Berry, 1985). This form of communication can appear verbally or non-verbally using various communication channels such as letters, advertisements or face-to-face meetings (Jones, 2007;Palmer, Dunford and Akin, 2009).
According to Soteriou and Chase (1998), customer communication in the service industry is even more crucial than in the manufacturing industry. This is agreed on by Solnet (2007) who states that the quality of customer interaction is an important factor for service companies in order to create a competitive advantage. However, it is not only important for creating competitive advantage, but it is also crucial in order to continue a company’s existence (Kumar, 2010). Besides, regular communication with B2B customers is likely to lead to a successful collaborative relationship between service providers and customers. Successful, effective and long-lasting B2B relationships have shown to create mutual value, a competitive advantage and improved firm performance (Perry, Rowly, Jones and Kupiec-Teahan, 2012). In order to communicate effectively with their customers, organisations should know who their customers are, what needs they have and what the most (cost-)effective communication methods are (Jones, 2007).
3.1.3.1.Communication methods
FIGURE 1.1
Media Richness Theory (Palmer, Dunford and Akin, 2009: 309)
3.1.3.2.Customer communication volume
In the B2B service industry there is always some form of communication between service providers and customers. This communication can be formed by a simple email or by frequent communications through for example the phone or face-to-face (Parry et al., 2012), and is important to build a long-term relationship (Godfrey, Seiders and Voss, 2011). However, when customers receive too much communication from service providers, it might work counterproductive. While communicating with B2B customers, it is important that the communication is to the point, includes relevant and accurate information and that the customer is not overloaded with too much and irrelevant information (Jones, 2007). Up on to a certain point an increase in communication keeps customers satisfied and responsive, but beyond that point an increase in communication results in less responsiveness of the customer (Soteriou and Chase, 1998;Godfrey, Seiders and Voss, 2011).
Customers often respond positive when organisations make use of multiple communication methods instead of a single method, because they perceive the organisation to show greater resource investment when using multiple communication methods. Using multiple channels is also likely to increase the speed of customer response to the messages they receive (Godfrey, Seiders and Voss, 2011). However, whereas some customers perceive using multiple and costly communication methods as a sign of relationship investment, others consider it as an inefficient use of resources that eventually might increase prices (Godfrey, Seiders and Voss, 2011).
3.1.4.After-sales corporate customer communication
As discussed in previous paragraphs, corporate communication focuses on a broad range of stakeholders, of which three stakeholder groups are crucial for an organisation’s existence (Cornelissen, 2004;Park, Chidlow and Choi, 2014). One of these stakeholder groups are customers with whom organisations communicate through customer communications. When moving the focus of corporate communication to the specific stakeholder group of customers, corporate customer communication (hereafter CCC) is created.
CCC involves all communication with both potential and existing customers (Troth and Trujillo, 1987;Görkem, 2014). However, once a potential customer becomes a customer of a service organisation, it becomes crucial to build, develop and maintain a relationship with the customer. Therefore, after-sales CCC is important (Sing and Ranchhod, 2004;Jones, 2007). Building a relationship once an organisation becomes a customer requires frequent and on-going communication. This results in the fact that the organisation can ensure a correct view of changing customer needs and expectations is created, as well as that they can generate feedback from customers and deal with problems (Sing and Ranchhod, 2004;Jones, 2007;Van den Hout, 2013).
3.2.Customer satisfaction
Because customer satisfaction is a multidimensional construct, it consists of several factors influencing the level of customer satisfaction. Including: 1) convenience – e.g. opening hours, parking place, 2) cost, 3) tangibles – e.g. interior, employee appearance, 4) grievances, 5) functional quality – e.g. reliability and accuracy, and 6) relational quality – e.g. responsiveness, friendliness and communication (Pareek, 2014). Whereas many definitions focus on satisfaction of the combination of these factors, the definition provided by Van Birgelen, De Ruyter, De Jong and Wetzels (2002:44) specifically focuses on the after-sales quality. These authors define customer satisfaction as “the customer perception of service performance during an after-sales mode”, where the contact mode is the interaction between the organisation and its customers.
In order to enhance satisfaction, it is important for organisations to create a personal connection with customers and ensure that they display caring, nice and respectful behaviours towards their customers (Söderlund and Rosengren, 2010). Ensuring that customers receive a service level that meets or exceeds their expectations is largely dependent on the actions of an organisation and its employees (Cambra-Fierro, Melero-Polo, and Vázquez-Carrasco, 2014;Pareek, 2014). However, in order to do this organisation should have insight in the past experiences, knowledge and customer expectations (Pareek, 2014).
Once customer satisfaction is created, it has been proven that it is related to an organisation’s business performance as well as its profitability and competitive advantage (Devasagayam, Stark and Spitz Valestin, 2013;Yeung, Ramasamy, Chen and Paliwoda, 2013). Companies with a focus on creating customer satisfaction tend to perform better than those lacking to focus on this creation (Sing and Ranchhod, 2004). Next to an increased business performance, customer satisfaction differentiates an organisation from its competitors (Tripathi, 2014). This leads to more long-term relationships with customers who spread the good word to other, resulting in an increase in sales (Devasagayam, Stark and Spitz Valestin, 2013;Srivastava and Sharma, 2013;Tripathi, 2014).
3.3.Corporate customer communication vs. Customer satisfaction
3.3.1.Customer understanding & Customer orientation
In order to grow, survive and gain competitive advantage it is crucial for organisations to understand their customer’s needs and interests (Singh and Ranchhod, 2004;Flint, Blocker and Boutin Jr., 2011). Whether an organiation succeeds or fails, is highly influenced by the degree to which they have knowledge about their customers. It is important to know as much as possible about the customer’s wants and needs (Daif, 2013). Therefore, companies should gather external knowledge about their customers and they should use this to improve the quality of their services (Tseng, 2012). Tseng (2012) defines customer knowledge as the understanding of the customer’s preferences concerning service quality, customer service and effective use of communication channels.
As Tseng (2012) states, the orientation of service organisations shifted from product-oriented towards customer-product-oriented, as organisations recognized that customer orientation and interaction can be a large competitive advantage (Solnet, 2007;Aguwa, Monplaisir and Turgut, 2012). By being customer-oriented and understanding their customers, organisations are able to avoid barriers to communication (Jones, 2007), and to fulfil their customer’s demand (Tseng, 2012). Besides, customer-orientation has shown to have a serious and positive effect on the organisation’s business performance. It has been investigated that companies with a medium to high customer-orientation are more profitable than companies with a low orientation (Singh and Ranchhod, 2004). Eventually, being customer-oriented and understanding customer needs and expectations are likely to increase customer satisfaction and the creation of B2B relationships build on trust (Singh and Ranchhod, 2004; Parry et al., 2012;Tseng, 2012). When acquiring external knowledge on customers, organisations are better able to adapt their services and communication in a way that satisfies their customers (Tseng, 2012). Lacking customer understanding will have negative consequences for the service quality, the lead-time and will make customer satisfaction management more costly (Aguwa, Monplaisir and Turgut, 2012).
3.3.2.Customised communication
As paragraph 1.3.1 shows, gathering information and external knowledge enables organisations to provide customers with customised communication and information that is of interest to those particular customers (Cornelissen, 2004;Tseng, 2012). Customisation is defined as the process by which a service and its communication is created and/or adapted to the needs and preferences of the customer (Datnas and Carrillat, 2013).
As shown previously, it is important that organisations use the communication method that is most effective for communicating with their customers (Jones, 2007). This might mean that the company has to adjust their communication for different customers, as they have different needs and interests (Parasuraman, Zeithaml and Berry, 1985). Godfrey, Seiders and Voss (2011) highlight the importance of adapting communication to individual customer characteristics, thereby including the adaptation to channel preferences as well as and content preferences (Datnas and Carrillat, 2013). Personalisation of communications improves the effectiveness of the company’s CCC, as customers are more likely to read e.g. webpages, newsletters or emails that include information adapted to the customer’s needs and interests. This is not only important for companies whose core business is information based, but also for those companies of which it is a side business, as communication plays a fundamental role in the customer’s service experience (Datnas and Carrillat, 2013).
3.3.3.After-sales corporate customer communication & customer satisfaction
Service and communication after the sales process is an important source of revenue for organisations (Singh and Ranchhod, 2004). The after-sales experience is largely influenced by an on-going process of interactions between the customer and the company (Klaus, Gorgolione, Buonamassa, Panniello and Nguyen, 2012). Every interaction between a company and its customers influences the customer’s perception of service quality and their service experience (Cornelissen, 2004; Klaus et al., 2012).
According to Sparks, Bradley and Callan (1997), the way in which a company communicates with its customers is very likely to influence the customer’s level of satisfaction. Customer contact – primarily the interaction with service employees (Gounaris, 2005), but also corporate communication – is seen as a primary determinant of how satisfied customers are with a service (Froehle, 2006). As stated by Pareek (2014), knowledge about an organisation plays an important role in the creation of customer satisfaction, meaning that sharing relevant information about the company is crucial for creating customer satisfaction (Cornelissen, 2004). Besides, in order to create a long-term relationship with B2B customers it is important to build trust, which is important in the formation of customer satisfaction. Also, the one feature that has largest impact on building trust is customer communication (Nienaber and Schewe, 2011).
Not only the positive attitude of the service employee (Kang and Hyun, 2012) and providing relevant information (Cornelissen, 2004;Pareek, 2014) results in customer satisfaction, also the organisation’s communication approach towards customer complaints plays a crucial role (Van Vaerenbergh, Lariviere and Vermeir, 2012). In case a service fails it is generally not the failing that leads to dissatisfaction, but the organisation’s response towards the customer’s complaint about this failing (Vázaquez-Casielles, Suárez Álvarez and Díaz Martín, 2010). According to Van Vaerenbergh, Lariviere and Vermeir (2012), it is important for organisations to have a communication approach to deal with customer complaints and to provide the customer with feedback to show what has been done with their complaint. Organisations should use all available tools and communication methods in order to deal with complaints, as it is shown that customers who receive a satisfactory response become more loyal after complaining and perceive a higher overall satisfaction than customers who did not complain or did not receive a response (Singh and Ranchhod, 2004).
sometimes conflicting communication. This inconsistency declines the effect of customer communication and therewith customer satisfaction (Görkem, 2014). Besides, even though customised communication is important, it is crucial to create a consistent and clear image for all customers (Cornelissen, 2004). Communicating a consistent and clear image is likely to create a favourable corporate image among customers, which has shown to increase customer satisfaction. Those customers who have a positive overall image of the company are usually more satisfied with the services and customer communication provided (Srivastava and Sharma, 2013). Therefore, everyone involved in corporate communication – from service employee to CEO – should communicate the same corporate image and identity towards customers. Especially those who represent the organisation towards customers: the CEO, service employees and the people responsible for communications (Cornelissen, 2004).
Combining all factors of after-sales CCC towards B2B customers, it can be concluded that it is crucial in order for a service company to survive as it has shown to positively influence customer satisfaction (Kumar, 2010). The human interaction with customers is thus fundamental in order for a service to be perceived as satisfactory (Salomonson, Aberg and Allwood, 2012). When the expectations of customers are not met they are likely to leave the service organisation (Park, Chidlow and Choi, 2014). Besides, favourable CCC and customer satisfaction not only lead to the improvement of the relationship with existing customers (Jones, 2007; Segoro, 2012), but satisfied customers are also likely to share their positive experiences with third parties, leading to an increase in sales (Devasagayam, Stark and Spitz Valestin, 2013;Srivastana and Sharma, 2013;Tripathi, 2014).
3.4.Influence of a parent company
3.4.1.Challenges for MNEs
Subsidiaries are not only embedded in the global corporate network of the MNE of which they are part, but they usually have created their own set of external relationships that are specific for their local market. These external relationships include among others suppliers and customers (Li, 2005). Because of these external relationships, the MNE faces diversity within the different countries in which they operate (Griffith and Ryans, 1997;Samiee, Jeong, Pae and Tai, 2001; Aguilera-Caracuel, Fedriani and Delgado-Márquez, 2014). This results in MNEs facing the challenge of deciding whether to standardise their approaches in all overseas operations or not (Griffith and Ryans, 1997; Aguilera-Caracuel, Fedriani and Delgado-Márquez, 2014).
3.4.2.International strategies
Both Yadong (2002) and Lin (2014) provide examples of possible international strategies. Whereas Lin (2014) provides the two extreme strategies of global integration and local responsiveness, Yadong (2002) provides a midpoint between these two. The global integration strategy focuses on standardisation and implementation of similar processes worldwide, while the local responsiveness strategy focuses on responding to local demands. The latter adapts services and organisational policies to meet national needs, local regulations and local business practices (Lin, 2014). Organisations have the opportunity to choose one of these extremes over the other, or to choose a combination of both strategies. A combination of the global integration strategy and the local responsiveness strategy results in the transnational strategy. In this case the MNE responds to local demands as well as to the pressures for integration from the global headquarter (Yadong, 2002). As mentioned previously, subsidiaries have external relationships. According to Li (2005), despite the external relationships, the relationship with the corporate headquarter is often really important for subsidiaries as these often provide the subsidiary’s resources.
3.4.3.Corporate customer communication in an international context
pricing depends on the local market. However, the degree of standardisation of communication varies across MNEs (Quester and Conduit, 1996). MNEs often choose to standardise the marketing and communication practices in order to create uniformity of the global image and message (Samiee et al., 2001). Often the basic message and corporate image are standardised, whereas the creative process is the responsibility of the subsidiary. However, the degree of standardisation depends on several factors, including the local industry structures, the market position of the organisation, the level of competition and the similarity in competitive practices. For example, in a highly competitive market or specific local structures, it is important to address the local needs in order to create a competitive advantage (Samiee et al., 2001). Nevertheless, it is always important to have global coordination on corporate communication, as long as there is space for local adaptation so that the message and method of communication is adapted to the local customer’s needs (Quester and Conduit, 1996; Samiee et al., 2001).
3.5.Summary
This chapter provided an insight in existing literature on the various aspects of the research questions. Definitions of corporate communication, customer communication, customer satisfaction and CCC are given to provide an answer to the first three sub-questions.
Combining the definition of corporate communication and customer communication, the definition of CCC is created. This is all communication from an organisation’s middle/top management towards their external customers. Customer satisfaction is formulated in various ways, but it all comes down to the comparison between a customer’s expectations and their actual experience. These definitions form the basis of the rest of this study.
Additionally, several factors influencing CCC are identified in this chapter. The expectations of the customer have an influence, as well as the communication method used to send a message and the frequency of CCC. Also understanding customer needs is of importance, and as a result customised communication influences how the customer perceives CCC. Finally, the degree of consistency within the service organisation and the way in which they deal with complaint management influences CCC.
4.METHODOLOGY
In addition to the literature review, empirical research is done. This chapter is created to provide insight in how the empirical research is designed, what methods are used to collect data and how the data collected is analysed.
4.1.Research Design
4.1.1.Exploratory vs. descriptive vs. causal
Step one of creating a research design is choosing whether to use an exploratory, a descriptive or a causal research design (Sreejesh, Mohapatra and Anusree, 2014). Exploratory research is the initial research into an idea; the researcher has observed something and is seeking for a deeper understanding. Exploratory studies help to understand and analyse a problem and to obtain necessary information that can be used later on to conduct a more detailed research (Sreejesh, Mohapatra and Anusree, 2014).
Descriptive research is basically the follow up of exploratory research; once a basis is established more information is needed on the subject (Sreejesh, Mohapatra and Anusree, 2014). It tries to describe, explain and interpret a phenomenon that is occurring at a specific place and time, and is usually concerned with e.g. conditions, attitudes, structures, perceptions, characteristics, activities or relationships of an existing phenomenon (Roberts, 2010; Sreejesh, Mohapatra and Anusree, 2014).
The last form of research design is causal research, by which the cause and effect relationship between two factors is investigated (Sreejesh, Mohapatra and Anusree, 2014). A causal research focuses on how change in one factor influences change in another factor and can result in three possible relationships: symmetrical (two factors change together but not due to changes in the other), reciprocal (two factors mutually influence and reinforce each other) and asymmetrical (a change in one factor is responsible for a change in the other factor). Usually these types of research are done through experiments (Sreejesh, Mohapatra and Anusree, 2014).
4.1.2.Quantitative vs. Qualitative research
Quantitative research often includes closed research questions and is originally about collecting numerical data (Curtis, 2013). It often answers questions that can be expressed in quantities, for example questions starting with “How many…”. It allows the researcher to gather unambiguous answers based on pre-formulated questions with identical answer options for every respondent. Besides, it allows the researcher to interrogate a large number of respondents and to show significant differences based on objective numbers (Thomas, 2004). However, the respondent cannot provide a detailed opinion and there is often no place for questions outside the pre-formulated format. There is no opportunity to examine the respondent’s opinion or reasoning in more detail and the ‘why’ or ‘how’ question is left unsolved.
Qualitative research on the other hand often includes open research questions and is used to gain insight and understanding into a certain process or phenomenon (Daymon and Holloway, 2011; Curtis, 2013). It provides an insight on how people think about a particular subject and it looks at the background of customer behaviour. Besides, it provides in-depth information by going into further detail on the underlying motivation, opinion and needs of the target group (Thomas, 2004; Daymon and Holloway, 2011). Qualitative research provides the researcher with the opportunity to ask more questions based on the respondent’s answer and the opportunity to adapt questions based on the results obtained. However, a disadvantage is the fact that this type of research is rather interpretative and subjective.
The degree of customer satisfaction is likely to differ across customers, as people have different expectations, motivations, needs and opinions. Conducting quantitative research makes it possible to find out how many people are satisfied or the extent to which they are satisfied, but it does not provide insight on the reasoning of the respondent. People have different reasons for being satisfied and qualitative research provides the opportunity to gain insight in these reasons.
4.1.3.Qualitative research method
According to Thomas (2004) case studies are often used in research projects where little or nothing is known about a particular occurrence. Previous research can be found on each of the separate variables of this research project, as well as on the relation between the service encounter and customer satisfaction. However, little or no research can be found on the particular relationship between after-sales corporate communication towards B2B customers and customer satisfaction. Single case studies offer researchers the opportunity to create an in-depth understanding and detailed description of a particular phenomenon, whereas multiple case studies provide the opportunity to explore similarities between cases (Thomas, 2004; Daymon and Holloway, 2011). In order to explore the particular relationship and to create an in-depth understanding, a single case study is used for this research. As there are several options to collect data when conducting a case study, paragraph 3.3 provides information on how data is collected.
4.2.Case Selection
When selecting a case, several aspects of the research questions are important to consider. First of all, the focus of this study is on facility service organisations. As explained in the introduction, in service organisations most emphasis is placed on the degree of satisfaction based on the interaction between the service employee and the customer. The quality of facility services is expressed by the degree of customer satisfaction, which is important know-how as organisations in this industry often win or lose based on the percentage of customers that is satisfied (Lepkova and Ūselis, 2013). Secondly, this study focuses on corporate communication towards B2B customers; thereby narrowing down the number of possible cases to those facility service organisations focusing on B2B. Finally, this study is looking at the subsidiaries of MNEs, thereby excluding those organisations that are active in only one country.
Facility Services an interesting case to study: how is this organisation dealing with the challenges of standardisation and how do their customers see the relationship between after-sales CCC and customer satisfaction?
4.3.Data Collection
There are several opportunities for collecting data when conducting a case study within a qualitative study. These include the investigation of existing documents, interviews, direct observation or participant observation (Daymon and Holloway, 2011; Colorado State University, 2014). Observation focuses on the behaviour of people, whereas interviews are used to gain insight in people’s reasoning. Comparing qualitative interviews to quantitative interviews/questionnaires, it is non-directive and more details and explanations can be registered, thereby a richer overview of the customer’s perception is created (Thomas, 2004; Daymon and Holloway, 2011). To find an answer to the open research question and to gain detailed information, interviews are conducted with customers of ISS.
As mentioned in paragraph 4.1 it is likely that people provide the interviewer with different answers to questions, which are likely to make it more difficult to analyse the interviews (Thomas, 2004). In order to create a structured analysis of the interviews and in order to compare answers, a semi-structured interview guide with open answer questions is used (appendix 1). Using this schedule, the interviewer is able to ask all respondents the same questions, in the same order providing space to go into more detail based on the interviewee’s answers (Thomas, 2004; Daymon and Holloway, 2011). In order to create questions focused on the phenomenon of the relationship between after-sales CCC and customer satisfaction, the interview schedule is based on an extensive review of the relevant literature. The questions are posted in a common language and definitions are given where needed.
4.4.Sample Size
A sample of 10 interviewees is randomly selected from the customer list provided by ISS. This selection is based on two criteria: the service offered and the business area the customer’s organisation operates in. The criteria ‘service offering’ is divided in single-service, multi-service and Integrated Facility Services (IFS) customers. A single-service customer is one for whom ISS supplies one of their services, whereas a multi-service customer outsources several services to ISS. In case of an IFS contract, ISS offers a complete package of e.g. cleaning, catering and security, including one management that is responsible for all separate services (The ISS Group, 2014b). The criteria ‘business area’ is divided in healthcare, industry and manufacturing, business and IT, and public administration (universities, detention centres etc.) (The ISS Group, 2014b).
Based on this division, from each area at least two interviewees are randomly selected, ensuring that each service type is represented at least once among all interviewees. By selecting two from each business area, a total of 8 interviewees are selected. Therefore, two interviewees are randomly selected from all business areas, making a total of 10 interviewees (appendix 3).
4.5.Data Analysis
The first step of the data analysis is an important one: ensuring that the words of the interviewee’s are preserved as precisely as possible (Thomas, 2004; Daymon and Holloway, 2011). This is done through audio recording, interviewees are asked on forehand if they give their permission to record the interview. The recordings help to capture the precise words of the interviewee, so that important answers cannot be forgotten (Daymon and Holloway, 2011). Based on the recordings, word-for-word interview transcripts are created allowing the use of direct quotations. To ensure that all data collected keeps intact, complete and organised, the data is organised in a structured way. It is mapped based on dates and names, and the recording and transcript are saved in one folder under the same name. To ensure that no data is lost, the data is saved on two electronic devises, a USB and in the cloud. Thereby it can be accessed anywhere and at any time.
Each category or subcategory represents a theme or phenomenon and helps to find similarities between interviewees. (Daymon and Holloway, 2011). Within the interview transcripts, the words and sentences related to a particular code are highlighted. By using the abbreviation the sentence can be related to the corresponding code.
The fourth step focuses on the interpretation of the data and on seeking connections and similarities between the answers of the interviewees. Chapter 5 includes a detailed explanation of these connections and similarities. Besides, step four focuses on the exploration of relationships between the data that is collected and the relevant literature. Chapter 6 is the discussion of the similarities between the data and literature review as well as the differences.
The fifth and last step focuses on the evaluation of the interpretation. Based on the literature review and data collection, a conclusion is drawn. In order for qualitative research to be meaningful it is important that the conclusions relate to the research questions. Besides, to create a useful research project, the interpretation and conclusion should be understandable for the reader (Daymon and Holloway, 2011).
4.6.Ethics
As the project involves human subjects, it is important to keep an eye on a few ethical considerations. Through a gate keeper access to the participants is realised. The participants are asked through email for participation in this study, the email is followed up by a phone call. In the email an extensive non-academic explanation of the research project is given, including the purpose of the study, its aims and the type of questions asked during the interview. During the telephone contact participants have the opportunity to receive further information. Once all factors around the study are clear, a date is set for the interview.
Before het interview starts, participants are asked once again if they are sure they want to participate in the study. Besides, participants are informed that participation is voluntary, that they may withdraw from the research at any time without reason and that the data will be treated with full confidentiality. During the data analysis, synonyms will be used for the participants so they remain anonymous and no link can be made between the answers and the participant.
answer questions, which do not include sensitive questions focused on e.g. the participants’ company’s performance or the participant’s personal factors.
Participants are provided with the opportunity to get insight in the results of the study, however it is mentioned that this opportunity is only given in case of a successful completion of the study. This is communicated to the participants before the interview, directly after the interview and through email a couple of days after the interview.
4.7.Summary
This chapter has outlined the methodology to conduct the research. It provides an insight in how the empirical research is designed, what methods are used, how data is collected and how the collected data is analysed. Comparisons are made between exploratory, descriptive and causal research as well as between qualitative and quantitative research methods. Based on these comparisons choices for certain methods are made and explained.
As little or no research can be found on the particular relationship investigated in this study, this research is an exploratory research project. Based on this choice, qualitative and quantitative are compared leading to the choice of qualitative research, as this is used to gain in-depth knowledge, to explore relationships and to find an answer to open research questions with numerous possible answers. In line with this, a single case study is conducted. The case selection is based on aspects included in the research questions: the focus on facility services organisations, the focus on B2B customers and the focus on MNE subsidiaries. ISS Facility Services is an organisation that perfectly fits these criteria and is the single case studies in this research. The necessary data is collected through semi-structured interviews conducted with a sample of 10 interviewees who are randomly selected from the customer list provided by ISS, as well as with the Director Corporate Development of ISS. Analysis of the collected data is based on five steps: 1) Transcribing interviews, 2) Organising data, 3) Coding and grouping data, 4) Interpreting the data, and 5) Evaluating the interpretation.
5.RESULTS
5.1.Definitions
5.1.Definition CCC
The interviewees were asked to what extent they see CCC as a method for service providers to provide information and to what extent as a method to gather information about the customer. Figure 5.1 provides an overview of the distribution of the interviewees’ answers.
When comparing the three possible answers, it can be seen that none of the interviewees sees CCC as a method for gathering information about customers only. It appears that the majority of interviewees (90%) see CCC as a method for both providing and gathering information. Where most customers mention it as an equal distribution, customer E states that both providing and gathering information is important, but that service providers should focus on gathering information about customer’s to a larger extent. Only one interviewee sees CCC as a method to provide information about the service provider rather than the other way around.
5.2.Factors influencing CCC
5.2.1.Expectations of CCC
When investigating the expectations of B2B customers concerning CCC, a wide variety of expectations occur. These expectations can be divided in expectations on what is communicated by service providers and how is communicated by service providers. Table 5.1 provides an overview of these expectations.
TABLE 5.1. Expectations of CCC
CATEGORY 1.2. EXPECTATIONS INTERVIEWEE
What
1. Information about strategic and tactical issues/steps of the relationship 2. Information about developments,trends and innovations in the facility
service industry
3. Information about the strategy and vision of the service provider, and about what moves them
4. Information helping the interviewee (e.g. to develop/determine their vision or to use in their daily activities)
A,G B,D,E,H
B,C,D,F,G
B,E,H, How
5. Service providers should know what themes correspond to the needs of the different levels at the customer’s organisation
6. Service provider should act in line with the customer’s policy and should follow and anticipate to developments within the customer’s organisation/industry
7. Service providers should listen to the customer and not only share their own story
A,B,E,G,I
A,E,G,I
8. Service providers should be on time, should know when to
communicate, should be trustworthy and should communicate in a respectable manner
9. There should be conformity between what service providers say and what they actually do
10. Service providers should deliver customised communication
D,F,G,J
D,F,G
I
As the above table shows, the two expectations on what should be communicated by service providers that show the most overlap between the interviewees are expectation two and three. Concerning this first expectation, service providers are seen as specialists in their field. The interviewees expect service providers to share their ideas, trends and developments so they can help the customer to fill in their needs, which also corresponds with the fourth expectation mentioned in table 5.1. Customer B provides an explanation:
“I expect service providers to provide me with trends, information on what their vision is about and developments in the facility services industry and the cleaning industry, so I can adapt my vision and strategy to the latest developments”
– Customer B
Concerning expectation two, it appears that most interviewees find it important to know what strategy a service provider follows and why they run their business the way they do.
“I find it important to know what move a service provider, why do organisations do what they do? The service provider should not just sell the product, but also communicate what they stand for.” – Customer C
Next to expectations on what a service provider should communicate, there are also expectations on how they should communicate. Six expectations are mentioned on how service providers should communicate, of which five are related to each other in terms of knowing and understanding the customer’s needs. Expectation five finds most overlap among the interviewees. As customer E states, it is important that the service provider gains insight into the (long-term) objectives of their customers in order to adapt to their needs.
“Corporate communication should be about the strategic and tactical issues that play an important role in the relationship between the service provider and the customers. The service provider should know what themes on a strategic and tactical level connect with the customer’s needs.” – Customer A
“It depends on the level: strategic or tactical. I expect the service provider to adapt to the level at which I have contact with them, so I get exactly what I
need.” – Customer B
In addition, it appears that four interviewees expect service providers to act in line with their policy and that they anticipate to developments within the customer’s organisation. Therefore, it is important that service providers gain insight in the customer’s organisation in addition to providing the customer with insight in the service provider’s organisation. Thereby, expectations six and seven are related to each other: in order to be able to act in line with the customer’s policy and to anticipate to their developments, service providers should listen to their customers and not only provide them with information about themselves
“I find it really important that a corporate organisation ensures that they know their customers. They should listen to the customer and not only share their own story.” – Customer I
Expectation nine focuses on the behaviour of service providers in terms of delivering what is promised. This expectation relates to expectation eight, where is stated that service providers should be trustworthy.
“We have made an estimation at the start of our relationship with our service providers. Based on that estimation we hire them. It is important that the service provider translates the estimation into the operation.” – Customer D
5.2.2Communication methods
The interviewees were asked whether they prefer a single communication method or a combination of multiple communication methods. It appeared that all interviewees prefer a combination of three communication methods: 1) face-to-face, 2) telephone, and 3) email. However, face-to-face communication is preferred over telephone and email. Table 5.2 provides an overview of the reasoning behind this preference.
Three interviewees brought up reason two, to which reason one can be related as well. Email is less effective to discuss ideas with each other and to ask additional questions, as it takes longer to reply to each other. Customer D clearly exemplifies:
“You have the ability to philosophise about ideas. It enables you to dive deeper into the question that is asked or into the vision that is shared. By communicating face-to- face you have the opportunity to ask more additional questions, you hear the emotions, you see facial expressions and you know if there is chemistry.” – Customer D
Going into further detail on the combination of face-to-face, telephone and email communication, it appeared that email and telephone are seen as preceding face-to-face conversations. Reason one relates to this, as five interviewees find sending information through email sufficient as long as a face-to-face meeting follows it up to discuss what the provided information can mean for the customer’s organisation. Without a follow-up the impact of the email is less effective.
As all interviewees prefer a combination of methods, they have a distinct opinion on when to use which method. It appears that the communication method is dependent on the impact of the message rather than on the subject. Messages with a small impact, for example to confirm or capture operational things, can be sent by email or telephone. However, for messages with a large impact such as discussing strategies or disclosing contracts, face-to-face communication should be used. As customer G explains:
“It is not really dependent on a certain theme. It is more that alignments and operational things can be discussed by email without having a face-to-face meeting. It depends on the impact and importance of the theme rather than on the theme itself. Once the impact and importance increase it is good to have a face-to-face conversation.” – Customer G
5.2.3.Customer communication volume
GRAPH 5.1.
Customer communication volume
As the graph shows, five interviewees prefer a face-to-face meeting three to four times a year; preferably once in every quarter. The interviews also show that such a meeting would be most beneficial if input generated through email is discussed. A striking result is that two interviewees did not provide a frequency, the following citations provide insight in their reasoning.
“It is important that the content of the newsletter is relevant, so you should not send a newsletter with little relevant content because you need to reach a pre-determined frequency.” – Customer F
“It completely depends on the subject and situation. If you do not have something to tell, it is useless to sit together. But a situation could also be of such importance that you have to meet three times a week.” – Customer G
overloaded and are likely to delete the message without reading. The interviews show that it is important for service providers to prevent message overload, as it will work counterproductive; the more information is send, the less the customer reads. Finally, 40% of the interviewees do not provide a frequency. Reasoning behind this lies in line with the reasoning explained for face-to-face communication.
For telephone communication most interviewees do not provide a pre-determined frequency. It appears that telephone communication should take place when needed, usually as preceding a face-to-face meeting as explained in the previous paragraph.
As is brought up by all interviewees, the message communicated – despite the method used– should be interesting. It should be focused on the needs and interests of the customer, and should add something to the customer’s daily working activities.
“The service provider should not send a one-size-fits-all brochure or email, but targeted information that adds something to my functioning.” – Customer A
5.2.4.Customer understanding
In paragraph 5.2.1 it already appeared that many expectations concerning CCC are related to understanding the customer’s needs and interests. It appears that all interviewees notice the importance for service providers to understand the needs of their customers. Table 5.3 provides an overview of options for service providers on how to create this understanding.
When analysing table 5.3 it appears that three of the options relate to CCC as a method to gather information about the customer’s needs. Five interviewees bring up the importance of communicating with the customer in order to find out their needs. It is stated that it is important for service providers and customers to discuss what they want to reach and how they can help each other in reaching their objectives. Customer F brings up that basic needs are discussed in the operation rather than on a corporate level, but also agrees on the fact that middle/top management should discuss their objectives. Two of these customers provide an interesting insight on communicating with customers in order to gain insight in their needs by stating that it is important to talk to everyone within the customer’s organisation; from CEO to front-office employee.
“On all levels it is really important that the service provider is able to understand the needs of the customer. If you are not able to do that, something goes really wrong.” –
Customer H
Option three relates to option two, as it focuses on a combination of following the organisation’s developments and communicating about these developments. It is important for service providers to follow the developments of their customer’s organisations and industries in order to know what the customer needs.
“We, as an organisation, also develop. It is important to discuss that development and proceedings with each other, and how the customer can respond to that so they can make our life easier.” – Customer G
“They should read our yearly reports, our vision documents, they should follow the developments within our industry, that kind of stuff. They should gain insight in our long-term objectives. Thereby they are better able to adapt to our needs.” – Customer E
“There are people on different levels who experience the corporate communication and therefore it should be adapted to that particular level. That way the different levels of the outsourcing organisation receive communication that is adapted to their specific needs.” – Customer J
The past three customer quotes all bring up the importance of responding and adapting to the customer’s needs. In line with this, seven interviewees highlight the importance of this, as it is likely to lead to competitive advantage. Besides, when targeting CCC to the needs of the customer, customers are more likely to pay attention to the message they receive. Customer C underlines this importance by stating that it often takes too long before service providers respond to their customer’s needs. It appears that it is important for service providers to become more commercial and decrease the response time.
5.2.5.Customisation
Paragraph 5.2.3 and 5.2.4 brought it up already: the importance of sending a targeted message and not sending one-size-fits-all messages. Six interviewees mention the need and importance of receiving customised communication. A result of sending customised communication is that customers are more likely to pay attention to the message and it is more likely to be of use for customers in their daily activities.
However, in order to deliver customised communication it is necessary to relate back to customer understanding. Without customer understanding it is unlikely that the service provider is able to deliver a message targeted to what the customer needs. Therefore customer understanding and customisation are unconditionally related to each other.
5.2.6.Partnership
Reason one stands alone, as the three interviewees providing this reason are subject to a European tender. In this case the European Union obliges governments and public services to start a procedure for commands that exceed a certain amount, resulting in all service providers having the same chance. However, as can be seen customer D states that CCC has both a small influence and a large influence. Reasoning behind this is the fact that customers have option years once a project is awarded.
“After the first years of our contract with a service provider we have some option years. If is see that we have created a partnership with the service provider and I have enough confidence in the future, I will make use of those years.” – Customer D
state that what happens in the operation influences the decision to a larger extent than what happens on a corporate level.
“When you are planning to renew a contract you are looking for other input and information. Corporate customer communication could create a certain image, but the operation is more important in that decision” – Customer F
Opposite of these results, three interviewees find that CCC has a large influence on the decision to renew a contract. All of them provide the reason that having a good relationship is important and has a large influence. It is shown that CCC influences this relation to a large extent, as the communication is important for building trust and creating a relationship. Whereas purchasing criteria and price are mentioned by several employees as having a larger influence than CCC, these three interviewees provide another insight: when the search for a new service provider does not lead to a moderate decrease in costs, they will stay with the current service provider.
“I think that having a good relationship with a service provider results in seeing them as a partner rather than as a supplier. And I take that in my consideration to decide if we will start a tender or not. If you have to choose a new partner, you also have to start a new relationship and you have to ensure that it is a good relationship again. If you already have a good relationships and starting a new partnership does not result in a reasonable increase in money, I will not start a tender” – Customer E
5.2.7. Complaint management
GRAPH 5.2. Complaint management
As graph 5.2 shows two opinions stand apart from the other three answers. Customer A states that service providers should ensure that they fulfil contractual agreements, and customer E provides an interesting insight by saying that service providers should know about complaints before the customer does.
