Examining customer value perceptions of organizational buyers when sourcing from multiple vendors

Abstract

When organizational buyers outsource service from multiple providers, what leads buyers to shift business among current suppliers? In this article, the authors develop and examine a framework of organizational multiple-sourcing behavior proposing that customer value, customer satisfaction, and perceived switching costs influence these share-of-business repurchase decisions. Qualitative and quantitative results show that customer value for business services is multidimensional with three underlying dimensions: economical value, value of core services, and value of support services. Findings suggest that in newer relationships, customer value is the critical factor influencing share allocation. In older relationships, customer value as well as customer satisfaction and perceived switching costs are all important in allocating business share among suppliers.