Nonlinear antecedents of customer satisfaction and loyalty in third-party logistics services (3PL)

Abstract

PurposeThe purpose of this paper is to study the nonlinear impact of quality dimensions of third-party logistics (3PL) services on customer satisfaction and loyalty.Design/methodology/approachBy interviewing 167 small-size companies, and using penalty and reward contrast analysis, the paper explores the nonlinear impact of seven dimensions of 3PL services (safety, fault’s recovery, reliability, speed, flexibility, communication, and friendliness) on customer satisfaction and loyalty.FindingsThe results confirm the existence of the dimensions’ nonlinear impact on customer satisfaction. It also shows that some quality dimensions have a direct and nonlinear impact on loyalty. The dimension “friendliness” has a direct impact on loyalty if the company has a below market average performance, which may lead customers to switch service providers. “Flexibility on collection and delivery” has a direct impact if the company has a higher performance, contributing to customers’ intention to continue using the service. Another finding is that, if the company delivers good service recovery after the customer found faults in the service, and if customers trust the company service, they say they intend to continue to work with the company.Research limitations/implicationsThe present research focused only on small companies in one country (Brazil). Further studies should be carried out to explore different countries, with different realities, and different size of companies.Practical implications3PL companies should not only deal with customers’ satisfaction, but also with other quality aspects that directly affect customer intention to continue doing business with the 3PL service provider. These are friendliness, flexibility regarding time and frequency of collection and delivery and faults’ recovery.Originality/valueThe present research confirms that the personal relationship is a crucial aspect to be managed in order to keep customers in the long term. In addition, as opposed to most research looking for the antecedents of satisfaction and loyalty of 3PL customers, the present research shows that there is a direct nonlinear impact of the dimensions’ performance on customers’ loyalty, what should be taken in consideration by 3PL managers. It also shows how penalty-reward contrast analysis may reveal nonlinear antecedents that could be used for better understandings companies’ success in the long term.