Buffering B2B service failure: The role of customer engagement

Abstract

Research has shown that customer engagement contributes positively to competitive advantage. It is well-established that in the process of building and maintaining customer engagement, companies may make mistakes (service failures) that can jeopardise the success of customer-firm relationships. Studies on customer engagement have mostly focused on individual consumers, making this understanding in business-to-business (B2B) settings limited. Further, research on the interaction between customer engagement and service failure is scant. Given the unique characteristics of B2B marketing and relationships, we investigate the role of industrial customer engagement in customer responses to service failure. This knowledge is critical given the detrimental effects of B2B service failure on business relationships, revenues and profitability. We report findings from three studies, which show that high levels of industrial customer engagement act as a buffer to the negative effects of service failure on customers. This finding is pronounced for failures that are small and repeated over time. B2B marketing managers are encouraged to develop, measure and monitor customer engagement, while simultaneously seeking mechanisms that allow customers to voice failures, especially those that may seem small but occur repeatedly.