measuring customer satisfaction in the
context
“Measuring customer satisfaction in the context of a project-based organization”

Tuomas J. Ahola, Helsinki University of Technology
[email protected]

Jaakko Kujala, Helsinki University of Technology
[email protected] ABSTRACT


organization have been studied extensively in the context of traditional product-oriented
industries such as consumer goods and in the context of mass-produced services such as hotel
services or air travel services. Numerous studies and publications have almost unanimously
concluded that measuring customer satisfaction can lead to several benefits for the organization
applying it:

• CSM results can be used to discover important strengths and weaknesses in
product/service offerings and more effectively focus improvement efforts towards these
issues (Lin & Jones, 1997; Emerson & Grimm, 1999; Sharma et al. 1999; Yang, 2003a;
Lam et al., 2004).
• Depending on the industry context, CSM results may be used to estimate the degree of
customer loyalty which is vital for long-term revenues (Gronholdt et. al, 2000; Lam et al.,
2004).
• CSM enables the supplying organization to compare the performance of its different
business units in different time periods and locations (Jones & Sasser, 1995).
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• CSM is useful for assessing the effectiveness of efforts to redesign elements of the service
delivery system (Chase & Bowen, 1991; Juran & Gryna, 1988).
• Customer satisfaction can be used as a basis for customer segmentation
(Athanassopoulos, 2000).
• According to McColl-Kennedy and Schneider (2000), measuring customer satisfaction is
not a neutral act, but an intervention. The opinions of the customer whose satisfaction is
measured can be affected by the measurement process
• CSM can be used by the supplier as a symbolic activity for demonstrating customer-
oriented behaviour (Kujala & Ahola, 2004).

Striving for high customer satisfaction can be considered important, since increased customer
satisfaction has been linked to customer behaviour that positively affects business results (e.g.
Kotler, 1994; Rust & Oliver, 1994; Vavra, 1997; Lam et al., 2004).



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Differences between B2C and project-based B2B organizations that
affect measuring customer satisfaction

In a B2C context the customer can often be clearly defined. The customer is in most cases an
individual person that purchases a specific product or a service for a specific price. For a project-
based B2B organization this is typically not the case. It is other organizations that buy projects
from the supplying organization, but individual persons within these organizations that make the
actual buying decisions. This makes defining the customer difficult. Should it be the entire
purchasing organization, or one or several individuals within this organization? Clearly, this
question has great implications towards measuring the satisfaction of the customer.

One should also consider how the concept of satisfaction is defined. Oliver (1997) defines
satisfaction as “pleasurable fulfillment”. He further links this fulfillment to an act of consumption
by the consumer. Oliver’s, like most existing definitions of satisfaction, view satisfaction as a
function of what is expected and what is experienced by the customer. But as stated earlier, the
customer is not clearly defined in a B2B context. It is important to differentiate whether CSM is
focusing on the satisfaction of the customer organization as a whole or the satisfaction of certain
individuals within that organization. These are clearly two different issues, since in the context of
a project delivery, there are several individuals involved from both the buyer and seller sides.
Another issue is the experience of consumption linked to most definitions of satisfaction. In a
B2B project delivery, not all individuals from the purchasing organization that are involved in the
project participate directly to the consumption, or use of the delivered project.

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It is rather straightforward to reason that in a project-based B2B context, to ensure the
continuation of a business relationship, the supplier needs to keep several individuals from the
customer’s side satisfied. However, it is also typically the case that certain individuals from the
purchasing organization have more influencing power in project purchase decisions

based B2B organizations. Project-based organizations often have a very limited amount of
customers and are very dependent of each of these customer accounts, when in B2C context the
customer base is often large and the dependence on one account is low. This has implications for
measuring the satisfaction of these accounts, and it can be argued, that it can be worthwhile to
invest more resources in measuring the satisfaction of one customer account, when the customer
base is small, since if the results of the measurement activity are not correct, the financial
implications for losing a customer are significantly higher. This issue has direct implications
towards whether or not customer satisfaction should be measured by different methods in B2B
and B2C contexts. This question is answered in the later sections of this paper.

Another key difference between a B2C product or service provider and a B2B project-based
organization is the nature of the organization’s offering. In a B2C context, the offering is
typically either a product or service and thus the CSM typically focuses on measuring the
customers satisfaction towards some elements (or attributes) of this offering. Which attributes
should be measured and how each attribute’s relative importance should be calculated is under
continuous scientific debate. In the context of B2B project deliveries, the offering often contains
a complex product (or hardware) component, and a service component including all the
interpersonal interactions related to conducting business between two organizations. The complex
technical nature of project product, which is intended for generating revenues for customer over
long period of time, makes it difficult for the customer to give an informed opinion how satisfied
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he is to specific product features. When comparing B2B project-deliveries to B2C product or
service offerings, it is in the former case even less clear, which attributes should be measured and
which of these two attribute-laden components (hardware and service) is more important towards
the aggregate satisfaction of the customer.

According to Granovetter (1985), embeddedness, or social bonding has great implications for
economic activity. Individual persons do not make purchase decisions solely by technical
reasoning, but interpersonal social ties significantly affect these decisions. Interpersonal social
ties and trust play a greater role in interorganizational economic exchange than they do in B2C

covering the topics of CSM, and service quality measurement. Service quality is distinct from
customer satisfaction but the two concepts overlap considerably and their boundary can be argued
to be somewhat blurred (Robinson, 1999).

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Customer satisfaction survey

Most academic studies and papers clearly consider CSM as an activity that is based on
standardized questionnaires that are delivered to a sample of the customer base. These
quantitative multi-attribute questionnaires are then analyzed via statistical techniques. To ensure
the reliability and generalizability of these results, the sample size needs to be considerable,
normally in excess of 50 customers per surveyed segment. Surveys are used to assess the
satisfaction of customers towards physical products and intangible services and in addition to the
traditional B2C context, they are also utilized in a B2B context (Bearden et al, 1993; Kujala &
Ahola, 2004). Most academic papers have aimed at contributing to extant knowledge by defining
the various attributes of the product or service offering to measure (e.g. Parasuraman et al., 1985;
Bolton & Drew, 1991; Bitner et al., 1990), how they should be measured e.g. should you measure
the customer’s perception of the offering (Cronin & Taylor, 1992 & 1994) or the difference
between customers expectations and experiences (Parasuraman et al., 1985 & 1988 & 1991), and
to how the relative importance of these attributes should be calculated (e.g. Green & Tull, 1975).

Customer satisfaction surveys usually fulfil three organizational needs:

• They enable the organization to compare the performance of its different business units in
different time periods and locations (Jones & Sasser, 1995).
• They can produce rich information for generating continuous quality improvement
activities, when they are examined carefully and used within a consistent framework (Lin
& Jones, 1997).
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• They are useful for assessing the effectiveness of efforts to redesign elements of the

mathematically relate to overall satisfaction.

Standardized and customized surveys

When implementing survey-based satisfaction measurement, the supplier can either utilize a
standardized and tested scale, such as SERVQUAL (Parasuraman et al., 1988 & 1991), modify a
standardized scale to better suit its business context, or develop the entire scale in-house.
Standardized scales have usually been rigorously tested for the validity and reliability of results.
However, because they are often developed to be used by different organizations operating in
different contexts, some measures involve clear compromises and do not optimally fit the
operating context of an individual organization. Customized surveys developed in-house by the
supplier have the advantage that the measures are developed with managerial knowledge and
expertise of the specific business context (Jeffries & Sells, 2000). However, their validity and
reliability is hard to verify. In addition, the results obtained with the use of customized surveys
cannot be compared with results obtained with standardized scales. This can make benchmarking
of CS difficult or impossible between organizations and if the supplier uses different customized
surveys for each of its sub-business units, comparison of CS may not even be possible between
them.
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Critical incident technique (CIT) and sequential incident technique (SIT)

As a method for assessing customer satisfaction CIT (and SIT) allows the detailed description of
problematic customer incidents as the customers perceive them (Flanagan, 1954). CIT also
allows the categorization of the critical incidents into homogenous groups, and thus makes
limited generalization of the results possible. The underlying assumption behind critical incident
technique (CIT) is that customer satisfaction is strongly affected by very positive or negative
experiences in the product/service delivery and consumption processes. These two techniques
have been used primarily in the B2C service context (Bitner et al, 1990), but have also been
successfully applied in B2B contexts (Lockshin & McDougall, 1998; Franco et al., 2004). By