Customer perceived value in B-t-B service relationships: Investigating the importance of corporate reputation

Abstract

The importance of customer perceived value (CPV) has been advocated in numerous publications over the recent years. The research presented in this article aims at 1) understanding drivers of customers' perception of economic value, especially when the service provided has high a degree of intangibility, and 2) assessing the consequences of value perceptions. The authors present a theoretical model of antecedents and consequences of CPV in a B2B service industry setting. Corporate reputation, information sharing, distributive fairness and flexibility are modeled as drivers of CPV whereas word-of-mouth (WOM) and search for alternatives (loyalty measures) represent the effects of CPV. A test of the hypothesized model using structural equation modeling showed that corporate reputation had substantially stronger effect on CPV than the other drivers measured. This indicates that when the intrinsic nature of service performance is hard to evaluate, corporate reputation works as substantial shorthand for value. Finally, customers' perceptions of economic value increase their likelihood of recommending the supplier and reduce their tendency to seek information about alternatives.