The Effect of Utilitarian, Hedonic, and Economic Value in Self- Production versus Co-Production Decisions

Thomas Hollmann, North Carolina State University

This study investigates the moderating role of relationship age on the relationship between customer satisfaction and customer defection behavior in business-to-business relationships. In the context of a business financial service provider, we show that the link between satisfaction and defection follows different functional forms for short-term, versus medium-term, versus long

-term clients. For short-term clients, we find a linear relationship, i.e. higher levels of satisfaction protect against defection. For medium-term clients, we find no relationship between satisfaction and defection. For long-term clients, we find a quadratic, inverted U-shape relationship between satisfaction and defection. As a result, long-term clients at a mid-level of satisfaction are at the highest risk of defection. We discuss implications for research and practitioners and suggest several avenues for future research.

 

Working Paper