3. blocker, flint, myers, slater - proactive customer orientation and its role for creating customer...

8/12/2019 3. Blocker, Flint, Myers, Slater - Proactive Customer Orientation and Its Role for Creating Customer Value in Globa

1/18Electronic copy available at: http://ssrn.com/abstract=2101422

ORIGINAL EMPIRICAL RESEARCH

Proactive customer orientation and its role for creating

customer value in global markets

Christopher P. Blocker &Daniel J. Flint &

Matthew B. Myers &Stanley F. Slater

# Academy of Marketing Science 2010

Abstract Todays business customers expect sellers not

only to respond effectively to their expressed needs but alsoto understand their business sufficiently well to proactively

address their latent and future needs. Yet, research shows

that many firms underestimate, misunderstand, or overlook

these customer expectations. To draw clarity to this

discrepancy, this study explores the notion of proactive

customer orientation and examines the degree to which this

capability offers an opportunity for competitive advantage.

While research in recent years has explored the role of

proactive customer orientation in new product performance,

empirical investigation in this stream of market orientation

literature is significantly underdeveloped. We assess the

impact of the proactive customer orientation construct on

value creation by taking a novel approach that examines the

proactive customer orientation value satisfaction

loyalty chain using data from 800 business customers in

India, Singapore, Sweden, the United Kingdom, and the

United States. We find that, relative to other firmcapabilities, proactive customer orientation is the most

consistent driver of customer value across our multinational

data set. Results also show robust effects for the interaction

of proactive and responsive customer orientation to create

superior value. Several moderating conditions further frame

the impact of this capability: intense levels of customer

value change, a global relationship scope, and a transna-

tional relationship structure. Overall, findings significantly

advance the understanding of the proactive dimension

within market orientation and provide marketers with

insights for voice of the customer processes.

Keywords Proactive customer orientation . Market

orientation . Customer value . Buyer-seller relationships

Introduction

Michael Porter (1985, p. xiv) stated that, Competitive

advantage grows fundamentally out of the value a firm is

able to create for customers. Companies create superior

customer value by providing ongoing solutions to customers

articulated needs as well as their latent and future needs.

Beyond the task of actualizing a customer value-based

strategy, sustaining it can be quite difficult (Woodruff

1997). To do so, strategists encourage firms to be market/

customer oriented. Market-oriented firms generate and share

intelligence about customer needs and take coordinated

action to satisfy those needs (Day2000; Kohli and Jaworski

1990; Narver and Slater1990). However, research exploring

how providers learn about and act upon customers needs

has predominantly focused on processes for responding

effectively to customerscurrent,expressed needs (Narver et

C. P. Blocker (*)

Department of Marketing, Hankamer School of Business,

Baylor University,

Waco, TX 76798-8007, USA

e-mail: [email protected]

D. J. Flint: M. B. Myers

Department of Marketing and Logistics,

College of Business Administration, The University of Tennessee,Knoxville, TN 37996, USA

D. J. Flint


M. B. Myers


S. F. Slater

Department of Marketing, College of Business,

Colorado State University,

Fort Collins, CO 80523, USA


DOI 10.1007/s11747-010-0202-9

J. of the Acad. Mark. Sci. (2011) 39:216233

Received: 19 October 2009 /Accepted: 6 May 2010 /Published online: 5 June 2010


2/18Electronic copy available at: http://ssrn.com/abstract=2101422

al. 2004) and, with few exceptions (Atuahene-Gima et al.

2005; Narver et al.2004; Tsai et al.2008), has offered little

empirical insight into the nature or effects of proactively

understanding customers latent and future needs.

Although being responsive to customer requests plays a

critical role in satisfying customers, qualitative studies

suggest that business customers also want providers to

proactively understand and address their latent and futureneeds as part of an ongoing, value-creating, relational

process (Beverland et al.2007; Flint et al. 2002; Tuli et al.

2007). Narver et al. (2004) named this market-oriented

capability proactive market orientation.1 Despite its impor-

tance, firms appear to frequently neglect or inadequately

attend to this proactive dimension (Tuli et al. 2007). For

example, studies by Schmidt et al. (2007) and Hagberg-

Andersson (2006) reveal that most providers only adapt in

response to customer requests and are reluctant to exercise

proactivity. Beverland et al. (2004) find that a lack of

provider proactivity can undermine customer loyalty and

lead to feelings of provider complacency. Thus, aside fromthe research gap on the nature and effects of proactivity,

evidence shows there is a gap in practice.

There are, however, a number of companies that show

exemplary levels of proactivity with customers. Firms such as

Motorola, Mattel, Steelcase, and Boeing have created inno-

vation labs where inventors, engineers, researchers, designers,

and marketers come together to observe customers, identify

problems, brainstorm solutions, and test them on customers

(Weber et al.2005). Others such as P&G and Frito-Lay have

designed store and home environments to gain foresight into

changing consumer behaviors. P&G has also developed

programs where employees actually live and work with

customers. These programs have led to many innovative and

profitable products (Lafley and Charan2008). Furthermore,

our own benchmarking research of 300 organizations

revealed that firms such as UPS, UTi Integrated Logistics

and McCormick have developed sophisticated processes for

proactively anticipating customer needs. However, most

firms in the study reported minimal competencies in this

area.

Firms cannot afford to lose even a few of their strategic

customers. Yet, most voice-of-the-customer (VOC) pro-

cesses are poorly suited to anticipate what customers will

value in the future (Zeithaml et al.2006). Additionally, with

the exception of the few studies noted above that explore

the seller-sided effects of proactive market orientation

upon new product program performance, no research of

which we are aware has empirically studied the nature or

strategic relevance of proactive customer orientation. To

advance this important stream of research, we developed

a measure of proactive customer orientation from a

customer perspective and empirically assessed its strate-

gic relevance alongside responsive customer orientationand other key marketing capabilities. In this study,

responsive customer orientation refers to a providers

capability to respond effectively to satisfy customers

expressed needs. Proactive customer orientation refers to

a providers capability to continuously probe customers

latent needs and uncover future needs, possibly offering

ideas even before customers realize they had such a need;

from the customers perspective, it reflects customers

perceptions that providers have proactive processes and skills

to successfully anticipate their latent and future needs.

Through a cross-national study of proactive customer

orientation and its effects on value, satisfaction andloyalty, we contribute to the market orientation and

customer value theoretical discourses. Our results provide a

striking finding concerning the cross-national generalizability

and consistently powerful effects of proactive customer

orientation on value perceptions that should alter future

measurement of customer value drivers. Findings suggest a

remodeling of most firms voice-of-the-customer processes

that are poorly suited for understanding todays dynamic

customers. Finally, we examine the influence of several

relationship-level moderating factors, i.e., intense levels of

customer value change, a global relationship scope, and a

transnational relationship structure, on the proactive customer

orientation-competitive advantage relationship (Day and

Wensley 1988) that help frame contexts where proactive

customer orientation may be most influential for value

creation.

Customer value and customer orientation

Customer value

Customer value represents the trade-off between benefits

and sacrifices that stem from a providers product and

relationship resources which customers believe are facili-

tating their goals (Ulaga and Eggert2006; Woodruff1997).

However, customer value perceptions are a moving target

because customers invariably change their expectations

(Day 2000; Eggert et al. 2006; Parasuraman 1997). This

dynamic aspect can critically challenge providers; when

customers needs shift and providers fail to adapt, customers

may become dissatisfied and terminate the relationship

(Beverland et al. 2004). Overcoming ongoing disconnects

1 Narver et al. (2004) specify proactive and responsive market

orientations as two forms of market orientation. However, the

constructs they measure deal only with identifying and satisfying

customers needs and do not encompass the other traditional

dimensions of a market orientation. Thus, in the interest of being

more precise we utilize the terms proactive customer orientation and

responsive customer orientation.

217J. of the Acad. Mark. Sci. (2011) 39:216233


3/18

between a provider and customer can be difficult, especially in

global relationships when geographic scope and socio-cultural

distance factor in. Providers may address these challenges by

responding to customersarticulated needs and by striving to

proactively understand their latent and future needs.

Responsive and proactive customer orientation

Since the publication of the Kohli and Jaworski (1990) and

Narver and Slater (1990) studies, the dominant research

stream that has addressed the issue of customer value

creation is found in the market/customer orientation literature

(Jayachandran et al. 2004). Although Kohli and Jaworski

(1990, p. 6) define market orientation as the organization-

wide generation of market intelligence pertaining to current

and future customer needs, Narver et al. (2004, p. 335)

contend that the satisfaction of latent and future needs has

received some theoretical comment ... but no systematic

empirical analysis. In reviewing the items in Jaworski and

Kohlis (1993) MARKOR scale and in Narver and Slaters(1990) MKTOR scale, the authors found no items that dealt

either with latent or future needs. Thus, they concluded that

market orientation is comprised of both responsive and

proactive dimensions, but that responsive market orientation

toward customers expressed needs is where virtually all

empirical analyses to date have focused(Narver et al.2004,

p. 335). This disparity is meaningful.

Specifically, customer requests give voice to customers

expressed needscurrent needs that customers are aware of

and actively solicit from providers. Notably, however, they

do not address customerslatent needsthose needs that are

potentially important but are difficult for customers to

articulate (Slater and Narver 1998). This is the domain

where a proactive customer orientation appears to play an

influential role as shown through qualitative studies of

business relationships (Beverland et al. 2007; Flint et al.

2002) and quantitative studies exploring new product success

(e.g., Atuahene Gima et al. 2005; Narver et al. 2004).

Specifically, a providers ability to uncover latent needs

through proactive dialogue, lead user research, or ethno-

graphic research may reveal early warning signs of changes

in customers needs (Flint et al. 2008; Slater and Narver

1998). Zeithaml and other leading marketing scholars (2006)

concur and suggest that what managers need are forward-

looking metrics that capture indications of the way

customers see the firm anticipating theiralternative futures.

Developing a customer-defined view of proactive

customer orientation

To advance this important stream of research within market

orientation, we developed a measure of provider proactive

customer orientation from a customer perspective using

qualitative inquiry. We then empirically examined its

strategic relevance relative to a responsive customer

orientation and three conventional marketing resources/

capabilities2offer quality, service support, and personal

interactionto assess proactive customer orientation within

a nomological network of dominant value drivers. The

framework is depicted in Fig.1.By utilizing the customer perspective, we follow the

lead of Deshpand et al. (1993, p. 30), who found that

customers perceptions of the degree to which a firm is

customer-oriented differed substantially from the manage-

ment team and are significantly more important than the

marketers perceptions. Ultimately it is customers who

determine the value created by providerscustomer-facing

capabilities (Madhavaram and Hunt2008; Srivastava et al.

2001). Furthermore, customers have in-depth insight into

their providers resources and capabilities (La et al. 2008;

Tuli et al. 2007). Thus, a customer-sided approach to

exploring proactive customer orientation (Steinman et al.2000) complements seller-sided research and is essential

for assessing its contribution to achieving competitive

advantage.

Qualitative inquiry

We conducted qualitative inquiry to develop the constructs

from a customers viewpoint. This approach allows the

customers voice to be used to assess (1) whether

customers actually distinguish between provider respon-

siveness and proactivity, (2) what proactive customer

orientation means to customers, and (3) how it may create

value within relationships. We conducted one- to two-hour

depth interviews with ten managers, which conforms to the

sample size conventions for this type of qualitative research

(McCracken 1988). Participants worked for firms in ten

diverse industries and managed a wide range of providers.

We asked participants to reflect on how their firm

experiences changes in what the organization values from

providers. Transcribed interviews produced over 250 pages

of text that were coded using Atlas.ti and interpreted into

thematic findings. Participants spoke at great length about

their ongoing efforts to gauge how providers handle their

changing needs.They described providersposture toward

their evolving needs using one of four categories: providers

2 Similar to other researchers, we use the terms firm resources,

capabilities, and value drivers interchangeably depending on a

reference to the seller or customer organization context. Within a

resource-based view of the firm, scholars discuss how various

categories of firms market-facing resources/capabilities (Madhavaram

and Hunt 2008; Srivastava, Fahey, and Christensen 2001) can

constitute key value drivers for customers within business relation-

ships (La, Patterson, and Styles 2008; Ulaga and Eggert2006).

218 J. of the Acad. Mark. Sci. (2011) 39:216233


4/18

(1) not respondingat all to new requests, (2) responding

wellto our requests, (3) just reactively following us,and

(4) proactively leading us.The first two focus on needing

providers to respond to customer-initiated requests; the

latter two reveal a need for providers to proactively

anticipate changes. Selected excerpts convey these catego-

ries. For example, William (pseudonym) highlighted the

importance of responsiveness:

I: So, at what point do you say that? You said, were

cutting [provider] off?

William: When theyre not responding to your

changing needs. The amount of business we do keeps

growing and we need providers that can match our

pace. When they cant, some providers have to go

bye-bye.... Were demanding more and more from our

providers. So weve changed some of our providers

because they cant meet those new requirements.

Yet, in other cases, participants indicated that what they

desired was provider proactivity:

Trey: So theyre not doing more business with us

because they just give us what we ask for and dont

get into the strategy of doing business with us. But

this other company, theyre thinking strategically

about the relationship. They said, weve been

working with your engineering department and there

are several things you really ought to think about

doing. We looked at them and said, Wow, youre

absolutely right! They presented it well and we

wrote them a check. Those providers are leading us.

They tend to be out in front of us, which is good! If

those providers were just keeping up with us, we

wouldnt have a choice.

Participants described these proactive providers as spend-

ing time to understand their firms strategies and thenanticipating ways to innovate current aspects of the relation-

ship. In essence, it involves forward thinking to anticipate

future needs that customers have not yet expressed:

Alan: Providers really need to be in synch with you

and understand your strategies. Then they can bring

things to the table that you dont know to ask about.

Youll help me fill in the blanks I forgot to fill in.

Theyll say, Hey, you know what? You forgot to

think about something. Heres a service that really

ought to be important to a company like yours.

Key insights from the qualitative inquiry were as follows.

First, consistent with the seller-sided perspective of Narver et

al. (2004), we find that customers easily distinguish between

provider responsiveness and proactivity. Often they cast

proactivity in a strategic light since it involves collective

understanding of customer firm goals/strategies. Second,

participants characterized proactive customer orientation as a

unique capability comprised of provider processes and

actionsthat enable providers to: identify their firms latent

and future needs, exercise strategic foresight, and enact

Offer Quality

Service Support

Personal Interaction

ProactiveCustomer

Orientation

Responsive Customer

Orientation

Customer

Value

Customer

Satisfaction

Customer

Loyalty

H1

H2

H5-H6

H7

H8

Customer Value

Change Intensity

H4a-c

H3

Relational Contexts:

Global Scope

Transnational

1

H4d

H4e

Note: Other control variables include customer firm size, relationship age, contractual status, exclusivity, annualcustomer spend, and any country factors (regulatory, governmental, political) that customers perceive as

offering provider advantages.

Figure 1 The role of proactive customer orientation for value creation in global business markets.



5/18

various accommodations (e.g., new solutions, ideas, and

collaborations). Key processes involved thoroughly analyz-

ing customer organizations and their dynamic environments

to help customers envision their possible futures. Finally,

participants expressed pleasure when talking about providers

that proactively anticipate their needs. One executive for a

large retailer commented that when he finds a truly

proactive provider he tries to hold on to them forever.Thus, the findings from the qualitative inquiry suggested that

a proactive customer orientation can be a source of superior

value creation.

Effects on customer value

Overall, findings from our qualitative inquiry indicate that

both proactive and responsive customer orientation posi-

tively affect customer value perceptions. In addition to

main effects, the strategic nature of these two capabilities

and potential synergy between them suggests they may also

(1) reveal positive curvilinearities reflected in increasingincremental effects (Agustin and Singh2005) as well as (2)

positively interact with each other to create superior

customer value. A few scholars have jointly examined

these constructs and either proposed or found negative

curvilinear effects or a negative interaction (Atuahene-Gima

et al. 2005; Tsai et al. 2008). However, these studies are

conducted in seller-sided contexts that assess how

providers allocate competing resources for new products,

and we are not aware of any studies that test curvilinear

effects/interactions for these constructs within customer

relationships.

With regard to potentially positive curvilinear effects, we

have conceptualized, similar to other scholars (Day 1994;

Jayachandran et al. 2004; Madhavaram and Hunt 2008;

Slater and Narver 1998), that proactive and responsive

customer orientations represent dynamic capabilities whose

processes foster renewal and innovation inside business

relationships. In a customer context, this means that as

provider proactivity and responsiveness reach higher

levels, these capabilities can serve as generative mecha-

nisms that enhance the entire portfolio of customer

relationship benefits and are perceived as satisfying their

higher-order needs; the significant pleasure customers

expressed in our interviews when they experienced high

levels of provider responsiveness and proactivity sup-

ports this notion. Furthermore, according to dual-factor

motivation theories, when lower-order needs are fulfilled,

fulfillment of higher-order needs has increasingly greater

effects on goal pursuit (Herzberg 1966). Thus, i f

customers perceive proactive and responsive customer

orientation as fulfilling higher order needs, these capabilities

would also demonstrate increasingly incremental, quadratic

effects on customer value.

With regard to a potentially positive interaction,

researchers presume that proactive and responsive customer

orientation can complement each other, i.e., the productive

capacity of one capability can be enhanced through its

interaction with the other (Atuahene-Gima et al. 2005;

Slater and Narver1998). In a business relationship context,

customers are constantly evaluating how their needs, both

expressed and latent, are being met by providers. As theyformulate these perceptions, it is likely that customers

thoughts about these two capabilities coalesce so that as

perceived levels of proactive (responsive) customer orien-

tation increase, customer attitudes about the efficacy of

responsive (proactive) customer orientation may be more

positive. This may be the case if a providers responsive-

ness toward a customers expressed needs translates into

timely proactive dialogue about latent and future needs;

conversely, proactive customer orientation efforts may be

carried out into new services or relational processes that

yield more opportunities for providers to exercise respon-

siveness to expressed needs in those areas. Finally, sinceboth proactive and responsive customer orientation involve

knowledge generation and sharing about customers latent/

expressed needs and how to fulfill them, it is likely that

customers perceive the knowledge developed through

proactive (responsive) processes and interactions as being

at least partially transferrable to responsive (proactive)

processes.

Based on the support and discussion above for the roles

of responsive and proactive customer orientation for

creating value in customer relationships, we hypothesize:

H1: Proactive customer orientation has a (a) positivelinear effect and (b) a positive quadratic effect on

customer value perceptions in a global business-to-

business context.

H2: Responsive customer orientation has (a) a positive

linear effect and (b) a positive quadratic effect on

customer value perceptions in a global business-to-

business context.

H3: The interaction of proactive and responsive customer

orientations has a positive effect on customer value

perceptions in a global business-to-business context.

Results from these hypotheses, similar to studies

examining market orientation from a customer perspective

(e.g., Steinman et al. 2000), can offer insights into the form

and extent to which proactive and responsive customer

orientation may independently and jointly create value for

customers in a global business-to-business context.

Conventional customer value drivers

To better assess the nomological validity and robustness of

proactive customer orientation, we also capture three



6/18

conventional marketing capabilities that have been tested

extensively and shown to explain significant variance in

business customer value perceptions. Specifically, we

incorporate key constructs from the major categories of

product, service, and relationship benefits provided to

business customers. Each of these capabilities or variants

of them have been modeled as key value drivers within

customer value and satisfaction literatures (see Gao et al.2005; Lapierre2000; Ulaga and Eggert2006for examples

and reviews).

Offer quality A providers offer is generally considered

synonymous with its product, where a product represents

any combination of goods and services. It is the core

thing a customer is purchasing in a provider-customer

exchange. Our focus is the customer-perceived quality of

the core product. Thus, offer quality is defined as a

customers judgment about the relative superiority of a

providers product compared to competitive alternatives

(Lapierre 2000). The positive effect of offer quality oncustomer value has support in a host of studies with

business buyers (Menon et al. 2005; Ulaga and Eggert

2006) and is often considered the dominant value driver

given that customers perceive the products that make up

offers to be principal avenues for fulfilling their needs

(Lapierre2000).

Service support Alongside the core offer, providers also

create value for customers through service support

resources. We define service support resources as ancillary

add-on services such as installation, training, or mainte-

nance that often differentiate between average and superior

providers in the marketplace. Research shows that these

resources facilitate the customers use of the core offer and

provide information to help customers deal with daily

issues (Homburg et al. 2005; Lapierre 2000; Ulaga and

Eggert2005,2006).

Personal interaction Research also demonstrates that

customers gain significant value through the social

benefits they receive in their provider relationships

(Gao et al. 2005; Gremler and Gwinner2000). Business

relationships provide ample opportunities for forming

social bonds (Gassenheimer et al. 1998). Strong social

bonds improve communication and the ease of doing

business with a provider over time (Ulaga and Eggert

2006). Thus, personal interaction in this study is defined as a

providers capability to foster a harmonious relationship that

facilitates interpersonal interaction and creates value (Bitner et

al.1998; Gao et al. 2005; Ulaga and Eggert2006). In sum,

we posit that customers overall value perceptions are

significantly affected by the perceived offer quality, service

support, and personal interaction but do not put forth specific

hypotheses, as these links are well-established (e.g., Lapierre

2000; Ulaga and Eggert2006).

Moderating effects

From a provider perspective, there is some risk associated

with investing in proactive customer orientation withoutunderstanding its strategic relevance or contexts in which it

may prove most valuable. The techniques that are com-

monly used to identify latent and future needs (e.g.,

scenario planning, ethnographic studies, and structured

customer visit programs) require ample resource commit-

ments. Also, the very nature of proactive dialogue into

customers latent and distant needs may at times result in

inefficient exploration and unproductive investments. As

such, firms may need to prioritize their investments in

proactive customer orientation for various customers or

segments. Thus, we investigate three factors that may affect

business customers desires and expectations for thiscapability and potentially amplify its role in value creation:

(1) the intensity of ongoing changes in what customers

value, (2) the global scope of the relationship, i.e., whether

the provider delivers services to the customer solely within

a single country or delivers services to the customer across

multiple countries, and (3) transnationality, i.e., whether the

customer and provider firms both operate and maintain

personnel together within the same country or conduct

business predominantly across borders.

Customer value change intensity Research indicates that

as customers experience pressures in their firm, the valuepropositions they seek from providers can change quite

rapidly and in significant ways (Beverland and Lockshin

2003; Eggert et al.2006; Flint et al. 2002). Scholars who

examine the dynamics of customerschanging desires call

this customer value change intensity (CVCI) and define

it as the rate of value change, the magnitude of difference

between new and previous customer desires, and the

simultaneous changes occurring (Flint et al. 2002). CVCI

is similar to market turbulence but is distinct in that it

refers to perceptions of ongoing change from a customer

perspective instead of a seller perspective and at an

individual relationship-level instead of a market-level.

For t hi s study, t he l evel of C VC I a customer i s

experiencing might affect the strengths of various value

drivers and offer insights into the contexts where proactive

customer orientation may be the most effective for value

creation.

Customers whose needs from providers are relatively

stable (low CVCI) are likely to place significant emphasis

on conventional provider capabilities such as offer quality,

service support, and personal interaction as these value



7/18


8/18

relationships involve customers and providers whose

operations and personnel reside in different countries and,

due to this structure, they must deal with many unique

challenges. Specifically, the geographic and socio-cultural

distance in transnational relationships limits face-to-face

contact, creates social distance, and is associated with

higher uncertainty compared with in-country, national

relationships (Zhang et al. 2003). These factors contributeto communication problems in transnational relationships

and make it difficult to even be aware ofmuch less adapt

toongoing shifts within the relationship (Skarmeas et al.

2008). Customers acquainted with these issues have

significantly lower expectations of how effectively a

transnational provider will address their ongoing relational

needs (Homburg et al. 2002). Applied here, we posit that

customers in transnational relationships will have significantly

lower expectations for proactive customer orientation. In

particular, from our qualitative inquiry, we have conceptual-

ized proactive customer orientation as requiring high levels of

interactivity and ongoing strategic dialogue. Thus, if customerexpectations are in fact low, stronger effects for proactive

customer orientation may exist in transnational relationships

given that providers who apply extra effortand find ways to be

proactive may create significant value for their customers.

H6: The positive relationship between proactive customer

orientation and customer value is stronger in trans-

national (cross-border) business customer-provider

relationships and weaker in national business

customer-provider relationships.

Results from this hypothesis can give insights into whether

proactive customer orientation may have increased relevance

for relationships structured by cross-border interaction.

Customer value, satisfaction, and loyalty

In addition to exploring the effects of marketing capabilities

on customer value, it is important to test the impact of these

value perceptions on satisfaction and loyalty, which are

linked to firm performance metrics such as higher stock

returns (Fornell et al. 2006) and profitability (Kumar and

Petersen 2005). Satisfaction reflects a positive affective

state resulting from a business customers cumulative

appraisal of its provider relationship (Lam et al. 2004).

Research suggests that individuals assessment of customer

value leads to the formation of satisfaction feelings

(Woodruff1997). Studies also confirm a direct relationship

between customer value and satisfaction (Gao et al. 2005;

Lam et al. 2004). In a related manner, we assess loyalty

defined in terms of a customers intent to repurchase

(Ganesh et al. 2000). Although the relationship between

satisfaction and repurchase intent has been questioned in

some cases (Mittal and Lassar1998), a significant amount

of research establishes this link (e.g., Fornell et al. 1996;

Ganesh et al.2000), sometimes in a nonlinear fashion (Lam

et al. 2004) or alongside other factors. Thus, based on

extensive support:

H7: Customer value has a positive effect on relationship

satisfaction in a global business-to-business context.

H8: Relationship satisfaction has a positive effect oncustomer loyalty in a global business-to-business

context.

Research methods

Data collection and sampling

Much of the limited empirical work on value drivers for

business customers has progressed within the bounds of

domestic, Western markets (Woodruff and Flint2006) and

has largely ignored (Homburg et al. 2005, p. 2) cross-cultural measurement or the influence of culture. To address

this issue, we collect data across five countries to test our

model. We feel it is imperative to not only validate the

potential effects of proactive customer orientation in a

single country context but also assess whether business

customers around the world conceive of this capability in a

commensurate way and, if so, test whether it may afford

similar value-creating potential across diverse cultures. Our

data collection focused on perceived value drivers with

business customers of information and communication

technology (ICT) services. Firms progressively depend on

exploiting information through enterprise resource planning(ERP), supply chain management (SCM), and customer

relationship management (CRM) systems. These systems,

along with a myriad of IT services that employ communi-

cations, software, and hardware, make up the ICT sector

and account for $3 trillion in global spending (Digital

Planet 2006). We surveyed key informants about their

firms relationships with ICT providers. To strive for

greater generalizability, the model was tested with firms

operating in 19 industries across India, Singapore, Sweden,

the United Kingdom, and the United States. We chose these

countries because they show significant cultural differences

(Table 1), span three continents, and have significant ICT

sectors. The sample was drawn from a commercial database

covering 750,000 firms in 25 countries. We drew a random

sample of 10,000 firm records with manager contacts.

To ensure informant competence, each respondent was

prequalified by phone and held a managerial role such as

VP of Technology or IT Director/Manager that involves

ongoing evaluation of ICT providers. We identified 2,680

managers who met the criteria and sent them an email with

a link to a secure web survey. We received 800 complete



9/18

responses, a 30% response rate of qualified respondents.

Responses spanned five countries including India (n=121),

Singapore (n=164), Sweden (n=143), the United Kingdom

(n=161), and the United States (n=211). Respondents

firms represented 19 NAICS industry types. The average

age of the provider relationship was 6 years with an annual

mean expenditure of $3.4 million. Fifty percent of

respondents held job levels of director or higher, and the

remaining reported middle manager positions; 80% indi-

cated a range equal to or exceeding 3 to 5 years job

experience interacting with ICT providers, and the largestrange was 1020 years (27%).

Potential non-response bias was assessed using non-

respondentsoral answers and testing against survey responses

(Mentzer et al.2001). Specifically, 137 non-respondents who

had indicated they were qualified (but not interested)

were contacted and asked five questions by phone (four

customer value items and job title). No significant

differences (p .05) were found. Thus, the potential of

non-response bias was not considered a significant

concern.

Measures and construct development

With the exception of the new measures we developed for

customer-perceived responsive and proactive orientations,

measures were borrowed from previous research and

adapted where necessary for a global business services

context (seeAppendix). The survey was refined with input

from 20 industry professionals in various countries,

scholars with expertise in buyer-seller research, and a

pretest sample of 96 surveys. For the new measures, we

developed a pool of items from the qualitative inquiry to

reflect responsive and proactive customer orientation and

submitted them to six researchers for review. Refined scales

were tested with samples of 75 and 104 business customers

obtained through two U.S. firms. Exploratory factor

analyses revealed two distinct factors. Internal consistency

for the resulting six-item scales was strong: =.97

(responsiveness) and =.93 (proactive) and confirmatory

factor analysis (CFA) showed high and significant item

loadings. Average variance extracted (AVE) for these

constructs met Fornell and Larckers (1981) thresholds

and were larger than its shared variance with other

constructs in the pre-test. Based on these robust empirical

results, we proceeded to use the newly developed proactive

and responsive customer orientation measures for testing

the hypotheses.

Finally, to examine the interaction and quadratic paths

for proactive and responsive customer orientation as well as

the CVCI moderator paths, we calculated multiplicative

terms using the two-step version of Pings (1995) single-

indicant estimation for latent continuous variables. Scholars

suggest that this approach produces robust estimates

(Cortina et al. 2001).

Analysis of measures

We evaluated the psychometric properties of the constructs,

assessed cross-national measurement equivalence, tested for

the influence of common method variance, and examined

control variables. The analyses were carried out for a

combined country sample and also for each country sample

in CFA. Table 2 provides construct correlations and

descriptive statistics.

Validity Results for the combined sample (RMSEA=.04;CFI=.98) and for each country showed model fit statistics

that met recommended values for good fit (Bollen 1989).

The factor loadings were high and significant (p.01). The

construct reliabilities for each scale exceeded .70, and the

average variance extracted (AVE) for each construct met

Fornell and Larckers (1981) thresholds and were larger

than its shared variance with other constructs. Thus, our

measures are unidimensional and possess convergent and

discriminant validity.

Cross-national measurement equivalence We examined

measurement equivalence using multi-group CFA

(Baumgartner and Steenkamp 2006). Results across the

five countries reveal support for configural (factor

pattern), metric (loadings), and scalar (measurement

intercepts) equivalence based on insignificant chi-square

differences (p >.10) for configural and metric equivalence

and good overall model fit (RMSEA=.027, CFI=.94) and

slight change in fit indices (RMSEA =.001, CFI=.006)

for nested models constraining loadings and measurement

intercepts (scalar equivalence). These results offer robust

Country Power distance Uncertainty

Avoidance

Individualism Masculinity Long term

orientation

India 77 40 48 56 61

Singapore 74 8 20 48 48

Sweden 31 29 71 5 33

United States 40 46 91 62 29

United Kingdom 35 35 89 66 25

Table 1 Hofstedes(2001)

cultural dimension scores for

sample countries



10/18

evidence that the measures reflect culturally-transferable

constructs and support pooling the data.

Common method variance Several steps were taken to

reduce the concern of common method variance (CMV).

Respondents were assured anonymity, encouraged to respond

candidly, and items were worded to minimize ambiguity

(Podsakoff et al.2003). We also employed a theoretically un-

related (marker) construct to estimate potential CMV

(Lindell and Whitney 2001), i.e., internal organization

communication effectiveness. For CMV estimation, results

for the combined and country sample analyses showed that

all correlations that were statistically significant before

adjustments remained significant, suggesting that results

cannot be accounted for by CMV (Lindell and Whitney

2001). Also, correlation adjustments estimating CMV effects

were very minor (.00 to .06) across all paths in all countries.

Control variables Steps were taken to account for factors

that might draw customers and providers into closer relation-

ships: relationship exclusivity, contract status, relationship

age (years), firm size (employees, revenue), monetary-value

of the annual relationship spending, and any perceived

advantages the provider holds due to regulatory, govern-

mental, or political factors in the country. No substantive

differences were found in analyses using control variables.

Results

We initially estimated a model with linear constructs/paths

only (model 1) to assess the main effects, and subsequently,

specified a model incorporating the interaction and qua-

dratic terms/paths (model 2). Fit indices for the combined

samples for model 1 (2=1513, d.f.= 416, RMSEA=.05,

CFI=.95) and model 2 (2=1650, d.f.=490, RMSEA=.05,

CFI= .96) and each country sample (Table 3) met or

exceeded critical values for good fit (Bollen 1989).

Statistical power estimates for the test of close fit were

also high (0.99) for all models (MacCallum et al. 2006).

Table4shows that all paths that are significant in model 1

are also significant in model 2 and with the same signs.

Coefficients for main effects in the pooled models are very

similar and instances within country models where path

coefficients are lower from model 1 to model 2 are cases

where interaction/quadratic terms show significant paths to

value. In this scenario, Ping (2003) suggests that if an

interaction or quadratic factor attains a significant coeffi-

cient, it is empirically robust and warrants attention to its

interpretation. To further assess the inclusion of the

quadratic/interaction terms, we created nested models that

constrained each of the nonlinear effects in model 2 to zero.

All nested models showed significantly worse fit (p .01)

using the 2 difference (Cortina et al.2001). Based on these

results, we use model 2 for hypothesis testing.

Hypothesis testing

Combined sample results For the pooled model, after

accounting for the effects of offer quality (=.23,

p .001), service support (=.02, n.s.) and personal

interaction (=.18,p .001), proactive customer orientation

(=.20, p .001), and responsive customer orientation

(=.22, p .001) positively affect customer value percep-

tions providing support for H1a and H2a. Given the early

Table 2 Combined sampleconstruct correlations and correlations adjusted for common method variance

Constructs 1 2 3 4 5 6 7 8 9

1 Offer Quality .61** .56** .48** .40** .09 .55** .58** .39**

2 Personal Interaction .63** .56** .59** .41** .06 .56** .60** .43**

3 Service support .58** .58** .38** .28** .23** .36** .37** .39**

4 Responsive Customer Orientation .50** .61** .40** .57** .14** .61** .64** .42**

5 Proactive Customer Orientation .43** .44** .30** .59** .31** .57** .50** .27**

6 Customer Value Change .04 .01 .25** .18** .34** .09** .01 .09

7 Customer Value .57** .58** .38** .63** .59** .14** .66** .47**

8 Satisfaction .60** .62** .39** .66** .53** .05 .68** .63**

9 Loyalty .42** .45** .41** .44** .30** .04 .50** .64**

Mean 5.03 5.21 4.98 4.68 4.06 3.69 4.83 5.14 5.55

Standard Deviation 1.21 1.32 1.34 1.31 1.34 1.44 1.17 1.26 1.21

*p .05, **p .01, Zero-order correlations are reported below the diagonal. Correlations adjusted for potential common method variance (Lindell

and Whitney 2001) are reported above the diagonal. Reliability and convergent/discriminant validity statistics for each measure exceeded

recommended thresholds in all 5 countries; these statistics and correlation matrices with common method variance adjustments for each country

are available from the authors.



11/18

stages of conceptualizing, measuring, and testing proactive

customer orientation with customers, we also assessed its

incremental explanatory power by comparing it to a model

constraining its effects to zero and freely estimating

responsive customer orientation and the three traditional

value drivers. Results showed that R2 for customer value

increases by 13% from .55 to .62 ( F=68.3, p .001)

when incorporating the effects of proactive customerorientation.

For the quadratic paths, which assess whether the forms

of association between proactive and responsive customer

orientations and value demonstrate increasingly incremental

effects, responsive customer orientation2 showed a signif-

icant positive effect (=.08, p .01) but proactive customer

orientation2 did not; this indicates support for H2b but not

H1b. The fact that findings show similar linear effects and

support for a quadratic responsive term but not proactive term

is somewhat surprising given the way customers characterized

the strategic nature of both constructs in our qualitative inquiry.

Without speculating, results simply suggest that both capabil-ities are critical factors and that proactive customer orientation

offers a significant and differential contribution to value

creation. Results for H3 also show they work in tandem; the

hypothesized interaction, proactive responsive customer

orientation, was significant (=.09,p.01), providing support

for H3 and the notion that these two capabilities enhance each

others productive capacity to facilitate value creation. Finally,

for the pooled model, customer value (=.76, p.001) and

satisfaction (=.73, p.001) demonstrate high effects on

satisfaction and loyalty, respectively, in support of H7 and H8.

Country-level insights When examining effects by country,

17 of 25 first-order paths (proactive and responsive

customer orientations and three conventional value drivers

five countries) show significant effects. Yet, whereas

proactive customer orientation is significant across all five

country markets, effects for offer quality in India, personal

interaction in India and the United Kingdom, responsive

customer orientation in Sweden, and service support in all

cases except the United Kingdom are not significant (p>.05).

Also, responsive customer orientation2 obtains a significant

effect only in Sweden, indicating its explanatory power may

not show robust effects across various contexts; however, the

proactive responsive interaction shows significant effects

across all countries with stronger effects shown in India and

the United States.

In terms of assessing the consistency of various value

drivers across the multinational sample, Table4 also shows

results for difference analyses by path across countries.

Path comparison tests show that 14 of 25 first order paths

demonstrate similar effects that are not statistically different

from their respective path in other countries. More directly,

the effects of offer quality are similar across three countries,Table3

Structuralmodelsformaineffectsforcombinedsampleandindividualcountries

ModelFit

Model1

Model2

All

IN

SG

SW

US

UK

All

IN

SG

SW

US

UK

2

(df)

1513(416)

539

(359)

569(359)

602(359)

63

5(359)

546(359)

1650(490)

743(490)

889(490)

846(490)

968(490)

770(490)

2

ratio

3.6

1.5

1.6

1.7

1.8

1.5

3.4

1.5

1.8

1.7

1.9

1.5

CFI

.95

.91

.96

.93

.96

.96

.96

.91

.94

.93

.95

.95

RMSEA

.05

.06

.06

.07

.06

.06

.05

.06

.07

.07

.06

.06

close

fit

1.0

.99

.99

.99

1.0

.99

1.0

.99

.99

.99

1.0

.99

Model1includesalllinearconstructs/paths.Model2includesalllinearconstructs/pathsandinteraction/quadraticproductterms/paths.INIndia,

SGSingapore,

SWSweden,

USUnitedStates,UK

UnitedKingdom



12/18

personal interaction across three, responsive customer

orientation across three, and proactive customer orientation

across five. Thus, results show that proactive customer

orientation is the most consistent value driver relative to

conventional value drivers and responsive customer orienta-

tion. This is especially noteworthy when compared with

well-researched factors such as offer quality that researchers

generally consider to be a, if notthe, primary value driver in

business-to-business relationships. This finding may be due

to a number of factors, such as a more dynamic marketplace

stimulating customers to value the proactive customer

orientation capability more now than in the past, or it may

be the fact that a few providers have developed this

capability thereby raising customers awareness of it now

whereas in previous decades it may have been less prevalent.

Regardless of the speculation, we find it striking that this

capability has not been operationalized before if it is

this important and that it is such a consistent driver across

this cross-culturally diverse sample.

In sum, these results show that proactive customer

orientation has a differential, significant, and highly

consistent effect on customer value across diverse cultures

and that it works in tandem with the responsive customer

orientation by virtue of their positive interaction.

Moderator analyses Results testing the moderating effect

of customer value change intensity (CVCI) on proactive

and responsive customer orientation and the three conven-

tional customer value drivers show support for H4a,b by

showing negative paths from CVCI offer quality (=

.14, p .001) and CVCI personal interaction (=-.10,

p .001). For H4c, CVCI service support (=.01, n.s.)

did not show significant effects which was not surprising

after finding insignificant main effects. Finally, results

showed a positive but non-significant path for CVCI

proactive customer orientation (=.11, n.s.) and a non-

significant path for CVCI responsive customer orientation

(=.00, n.s.). Thus, the predicted positive moderation of

CVCI on proactive and responsive customer orientation in

H4d,e is not supported.3

To further interpret these results, we plotted the factored

coefficients of each value driver upon customer value

(Fig. 2) using standard practices that examine slopes for

participants at 1 standard deviation above and below the

3 Moderator analyses are conducted for the pooled model only for

brevity and due to sample size limitations for conducting group

analyses by country and relationship factor.

Table 4 Effects for combined sample, individual countries, and country path comparisons

Model 1 Model 2

Paths All IN SG SW US UK All IN SG SW US UK

Proactive CO Value .26*** .40*** .25*** .28*** .28*** .24*** .20*** .30*** .23*** .20*** .16*** .16***

Responsive CO Value .28*** .33*** .12*** .11*** .37*** .30*** .22*** .28*** .09*** .13*** .29*** .32***

Proactive CO2

Value - - - - - - .04*** -.14*** .07*** .06*** -.10*** .04***

Responsive CO2

Value - - - - - - .08*** .08*** .08*** .14*** .09*** .06***

Proactive Responsive

COValue - - - - - - .09*** .17*** .04*** .05*** .15*** .07***

Offer Quality Value .25*** .02*** .39*** .34*** .32*** .15*** .23*** -.02*** .37*** .32*** .31*** .17***

Personal Interaction Value .18*** .12*** .32*** .30*** .23*** .01*** .18*** .13*** .32*** .34*** .24*** .01***

Service Support Value .02*** .18*** .05*** .11*** -.27*** .32*** .02*** .20*** .01*** .11*** -.25*** .30***

Customer Value Sat .76*** .71*** .64*** .76*** .81*** .79*** .72*** .71*** .64*** .76*** .81*** .79***

Satisfaction Loy .73*** .75*** .78*** .69*** .69*** .72*** .73*** .73*** .77*** .71*** .73*** .73***

Model 1 includes all linear constructs/paths. Model 2 includes all linear constructs/paths and interaction/quadratic product terms. For a given row, squares and circles represent

paths that are not significantly different from one another (p .10) based on a 2difference test conducted in multi-group CFA. Cells without squares or circles represent paths

are significantly different from other paths in the same row. CO= Customer Orientation, IN=India, SG=Singapore, SW=Sweden, US=United States, UK=United Kingdom,*p .05,

**p .01,

***p .001.



13/18

mean of the CVCI moderator using the path estimates from

the model (Cohen et al. 2003). As shown in Fig. 2, offer

quality and personal interaction demonstrate significant

effects on customer value that are significantly lower under

conditions of increasing CVCI. Service support shows

insignificant effects and provides little explanatory value

under low or high levels of CVCI. Finally, proactive and

responsive customer orientation show significant effects on

customer value but these effects are not significantly lower

or higher under varying levels of CVCI. This finding is

consistent with that of Kirca et al. (2005) who, in their

meta-analysis, found insufficient empirical evidence to

conclude that market turbulence is a significant moderator

of the relationship between market orientation and perfor-

mance. We speculate that one reason for not finding

significant positive moderation is that this relationship

might be more complex and work in tandem with other

factors (Jaworski and Kohli 1993). For instance, an

increased desire for proactive or responsive customer

orientation (based on CVCI level) may depend on: a

customer firms capabilities for internally managing

CVCI-associated tensions (Flint et al. 2002), its perceived

dependence on providers, or the firms use of cross-

sourcing to call upon secondary providers when changing

needs cannot be met by primary providers. Still, although

the hypothesized direction of increased effects on value is

not supported, results do frame proactive and responsive

customer orientations as capabilities that both remain

effective for value creation as customer value change

intensifies, even as conventional value drivers demonstrate

significantly decreasing effects.

To examine the moderating effects of global relationship

scope and transnational relationship structure, we used

multi-group analyses in SEM. To create comparison

groups, we used respondents answers to questions about

the global scope and transnationality of the relationship

they reflected upon. Results showed higher effects for

proactive customer orientation (=.37, p .001, 2(1)=

5.6, p .01) for customers being served across multiple

countries versus customers served in a single country (=.21,

p .001), providing support for H5. Results also supported

H6; customers being served by a transnational provider

whose operations and personnel reside in a foreign country

demonstrated much higher effects (2(1)=14.4,p .001) for

proactive customer orientation (=.65, p .001) than cus-

tomers being served domestically (=.20, p.001). Thus,

these relational contexts marked by increased complexity

and need for coordination appear to amplify the effects of

proactive customer orientation.

Post hoc exploration of potential mediation and curvilinear

effects

We conducted post hoc analyses to explore whether

proactive and responsive customer orientation show linear

or curvilinear effects for satisfaction and loyalty that may

operate outside the value-satisfaction-loyalty chain. We

used Baron and Kennys (1986) recommendations to test

for partial mediation. Results showed that, with the

exception of a path from responsive customer orientation

to satisfaction (=.27, p .001), customer value fully

mediates the effects of proactive and responsive customer

1

2

3

4

5

6

7

8

(-1)SD CVCI (+1)SD CVCI

CustomerValue

Offer Quality Personal Interaction Service Support

Proactive CO Responsive CO

Note: Points are plotted using factored coefficients from model results. Each line represents the fitted line

for customer value regressed upon each individual driver with respect to CVCI plotted for values one

above and one below the standard deviation of CVCI. See Cohen et al. (2003) for details.

main effects significant

interactions non-significant

main effect non-significant

interaction non-significant.

main effects significant

interactions significant

Figure 2 Interaction of Customer Value Change Intensity (CVCI) and offer quality, personal interaction, service support, proactive customerorientation, and responsive customer orientation on customer value.



14/18

orientation; direct paths for proactive and responsive were

significant when paths between value and satisfaction and

satisfaction and loyalty were constrained but insignificant

when added back. We also assessed whether customer

value might have a direct effect on loyalty. Results

confirmed a significant direct effect from value to loyalty

(=.07, p .001) even when mediating paths are freely

estimated, indicating that satisfaction only partially medi-ates the influence of customer value on loyalty.

We also tested for additional curvilinear effects. To do

so, we added paths between the proactive customer

orientation2 and responsive customer orientation2 and

satisfaction and loyalty. Results showed that the proactive

customer orientation2 demonstrates a significant positive

effect on loyalty (=.11,p .01) but not on satisfaction (=

.06, n.s.). A nested model constraining the path from

proactive customer orientation2 loyalty to zero demon-

strated significantly worse fit (p .01) using the 2

difference criterion (Cortina et al. 2001, p. 351) which

adds further weight to this result. Conversely, responsivecustomer orientation2 did not show significant effects for

satisfaction (=.08, n.s.) or loyalty (=.01, n.s.).

Overall, the most interesting finding from post hoc results

is that proactive customer orientation not only has a positive

effect on loyalty through the value-satisfaction-loyalty chain

but alsoat very high levels based on positive quadratic

resultsmay reveal a positive effect on loyalty. Other results

largely validate the value-satisfaction-loyalty nomological

network we examine in a multi-national sample and offer

potential insights for the impact of exceedingly high levels of

responsive customer orientation on satisfaction.

Discussion

The role of proactive customer orientation

The results of our study provide strong evidence that

proactive customer orientation is a cross-culturally valid

and strategically important capability for value creation

in global business-to-business markets. Whereas research

and practice continue to stress the need for up-front and

ongoing adaptation toward customers requests (Mukherji

and Francis 2008), customers across various global

markets also desire providers to help them go beyond

what they ask for; they want providers to devote energy

toward proactively anticipating their evolving needs. We

set out to advance this idea by conceptualizing, measuring,

and testing proactive customer orientation with customers

and assessing its capacity to explain superior value

creation among other known value drivers. Effects are

strongly positive and, surprisingly, reveal proactive cus-

tomer orientation to be the most consistent driver across

the diverse five country sample. These findings suggest

that business customer expectations are now at a stage

where offering a strong core value proposition and being

highly responsive to customers changing needs may not

be good enough to constitute an attractive, enduring

competitive advantage in the eyes of customers.

That said, we want to be clear with regard to the

interplay between proactive and responsive customerorientations within customer relationships. Some scholars

have indicated that proactivity with customers can in some

ways displace the role of merely responding and have

devalued the impact of responsiveness vis--vis proactivity

for creating long-term customer loyalty (Beverland et al.

2004,2007). While that scenario may be the case in some

contexts, our results show that proactive customer orientation

has a significant, differential effect on value creation

that, if neglected, likely yields a suboptimal customer

relationship experience but also that responsiveness

continues to play a distinct, critical role in value

creation. Analyses also reveal that proactive customerorientation likely enhances the impact of responsiveness

(and vice versa) as demonstrated through their significant

interaction within customers perceptions.

To take results further into understanding various buyer-

seller contexts, we found evidence in each moderator

analysis that value change intensity, global relationship

scope, and transnational relationship structure help frame

the strategic relevance of proactive customer orientation.

Moderation results generally propose that an increasingly

fast-paced business environment marked by a flurry of

global agreements and cross-border interactions will

continue to place importance on providers exercising

proactive customer orientation. Finally, post hoc results

show that high levels of proactive customer orientation

may have positive effects upon loyalty; although our

general results provide strong support for the value-

satisfaction-loyalty chain, the potential of quadratic

effects may have significant relevance in contexts where

the association between satisfaction and loyalty is not

sufficiently strong (Mittal and Lassar1998).

From a managerial view, an ability to proactively

anticipate what customers will value depends on processes

that focus on a very different aspect of customers worlds

than traditional voice-of-the-customer or customer intelli-

gence efforts (Zeithaml et al. 2006). Knowing what

customers value currently is akin to looking at snapshots;

anticipating what customers may value in the future is

similar to a moving videoit requires a focus on the

dynamics of change. Customer sensing along these lines

requires close customer interactions conversing about topics

that appear on the periphery. Proactive processes may focus

much more intently on changes within customers environ-

ments, firms, as well as managerial perceptions, strategies and



15/18

tactics; these are likely the very interaction processes that

enhance value co-creation (Payne et al. 2008). We believe

that, despite how daunting these tasks might seem, world-

class firms today have the analytical processes (e.g., data

mining) and interpretive tools (e.g., ethnographic research)

needed for developing a proactive customer orientation that a

decade ago would be unthinkable.

We also find it interesting that the mean for proactivecustomer orientation in our study (4.06, Table 2) was

significantly lower than all other value drivers (p .01).

This rating suggests that potential opportunities exist for

providers to improve their proactive customer orientation in

the minds of buyers. Additionally, research shows that

providers generally adapt only in response to customer

requests (Hagberg-Andersson 2006; Schmidt et al. 2007).

This stance may arise from major gaps between the way

customers and providers think about customers needs in

the first place. Specifically, Tuli et al. (2007) find that a

high percentage of customers perceive a providers efforts

to adapt (92%) to their evolving organizational needs is anessential relationship process but that only 4% of providers

identify ongoing needs identification and adaptation as

being important or relevant to customers. In light of these

studies, our results provide a call to action for marketers

who underestimate the proactive dimension of customer

orientation in their customer relationship strategies or

generally capture rear-view mirror metrics in the voice-

of-the-customer (VOC) processes (Zeithaml et al. 2006). In

particular, it appears that if firms do not advance beyond

traditional VOC processes that typically do not excel at

proactive anticipation of customers future needs, these

providers will eventually find themselves at a competitive

disadvantage. As such, a significant modification of current

VOC processes may be in order for many firms, especially

ones operating in global markets.

Limitations and future research on proactive customer

orientation

The contributions must be considered in light of their

limitations. Key informant data can be susceptible to common

method variance (CMV); yet the partial correlation technique

we use suggests the results cannot be accounted for by CMV,

which is consistent with research arguing that the risk of CMV

in organizational research is substantially lower than is

often assumed (Rindfleisch et al. 2008). We also measure

perceptions based on managersstatic assessments. Future

research should consider capturing data that track varia-

bles longitudinally and within developing markets, various

industries, and other culturally-diverse markets with larger

samples.

Understanding proactive customer orientation, with its

many facets and inputs back into the firm, could be a program

of research in itself. Research might focus on basic firm

resources, such as the knowledge and skills of individual

employees and the unique types of data required that interact

to comprise proactive customer orientation (Madhavaram and

Hunt 2008) as well as customer variables that may foster

success in relationships. Another line of inquiry could

explore the meaning of proactivity to provider and customer

managers and the presence of path-dependent processesthat trigger a positive trajectory of anticipation. A deep

understanding of the thoughts, feelings, and relationship

implications involving what it is like for providers to

experience success in anticipating needs and for customers to

have their needs anticipated might offer useful insights into

what sets extraordinary business relationships apart from

average ones.

Given that providers may be reluctant to incur the costs

associated with developing proactive processes, it is critical

to explore the conditions where proactivity is mutually

beneficial for providers and customers. It seems likely that

the more dynamic and competitive an industry, the morelikely a proactive customer orientation can offer a

competitive advantage, but this must be tested. Similarly,

the longer the lead time required for products to be

developed, the more critical anticipation becomes. For

example, the launch of a satellite or other complex in-

novations might require anticipation of what will be valued

years into the future. Finally, beyond satisfying and

retaining customers, an important area to investigate is

the strategic benefits, such as insight into firms markets or

development of firm capabilities that may accrue when

engaging in proactive anticipation processes with custom-

ers (Teece2007).

Conclusion

Scholars have called for empirical insights into strategies

and metrics that capture how firms can proactively

anticipate customerslatent and future needs (e.g., Zeithaml

et al. 2006, pp. 174, 180). In response, this study further

conceptualizes and examines the notion of proactive

customer orientation by using data across five diverse

countries and testing its strategic relevance for superiorvalue creation in various contexts. While several significant

advances are made, we hope that this study provides an

impetus for further research on this important topic.

Acknowledgments For their insightful feedback on earleir drafts of

this manuscript, the authors would like to thank the editor, four

anonymous reviewers, as well as David Schumann, Mark Houston,

Chris White, Wolfgang Ulaga, and Brian Fugate. We also gratefully

acknowledge the financial support provided by the Demand and Supply

Integration Forum in the College of Business at The University of



16/18

Tennessee and Schneider National Corporation as well as the support of

Tom Nightingale.

AppendixConstruct Measurement Items

Respondents marked their agreement on a scale from 1

(strongly disagree) to 7 (strongly agree). Except wherenoted, prompts included: C om pared t o w hat w e

expect from our companys best providers, this service

provider ...

Responsive Customer Orientation (newly developed measure), C.R.=.93,

=.95, AVE=.74, Loadings range=.80.88

Always responds effectively when we ask them to make changes.

Takes immediate action when we tell them weve changed what we

want from the relationship.

Reacts quickly to our requests for changes.

Is always flexible to adapt to changes we ask for.

Never stops short of fully accommodating our requests for changes.

Is always willing to accommodate our requests for changes.

Proactive Customer Orientation (newly developed measure), C.R.=.93,


Excels at anticipating changes in what we need from them before we

even ask.

Seems to spend time studying changes in our business environment

so they can exercise better foresight about our future needs.

Successfully anticipates changes in our needs.

Presents new solutions to us that we actually need but did not think

to ask about.

Is always looking for clues that might reveal changes in what we

value beyond what we currently ask of them.

Presents new ideas to us that help us keep pace with our changing

environment.

Offer Quality (Homburg et al.2005; Ulaga and Eggert2006), C.R.=.91,


Exceeds our standards for quality products and services.

Consistently provides quality products and services to us over time.

Provides us with excellent quality products and services.

Personal Interaction (Gremler and Gwinner2000; Ulaga and Eggert

2006), C.R.= .90, =.90, AVE=.76, Loadings range=.85.89

Maintains excellent personal interaction with our people.

Has built a very good working relationship with us.

Is very easy to work with.

Service Support (Ulaga and Eggert2006), C.R.=.90, =.90, AVE=.78,Loadings range=.84.90

Offers excellent support services to help us deal with day-to-day

issues.

Provides excellent support services.

Offers superior support services that always provide the appropriate

information right when we need it.

Customer Desired Value Change Intensity (Flint et al.2002), C.R.=.93,


Our needs from this provider are constantly changing.

What we want from this service provider changes very rapidly.

Due to significant changes we are experiencing, we often ask this

provider to do things drastically different from the way they have

done them in the past.

Changes in what we want from this provider reflect large shifts in

our business needs for them.

Due to the rapid changes we are experiencing, we want this provider

to make a large number of modifications in their services.

Customer Value (Gao et al. 2005; Ulaga and Eggert2006), C.R.= .92,

=.92, AVE=.73, Loadings range=.84.89Creates superior value for us when comparing all the costs versus

benefits in the relationship.

Considering the costs of doing business with this service provider,

we gain a lot in our overall relationship with them.

The benefits we gain in our relationship with this provider far

outweigh the costs.

Our company gets significant customer value from this provider

relationship.

Satisfaction (Lam et al.2004), C.R.=.94, =.94, AVE=.84, Loadings

range=.88.94

In general, my company is very satisfied with the services offered by

this provider.

Overall, my company is very satisfied with its relationship with thisprovider.

Overall, how satisfied is your company with this provider?

(extremely dissatisfiedextremely satisfied)

Loyalty (Doney and Cannon1997) (Extremely unlikelyExtremely

likely), C.R.=.88, =.89, AVE=.70, Loadings range=.82.87

Given that there is a need, we intend to continue doing business with

this provider for the foreseeable future.

Given that there is a need, how likely is it that your firm will

continue doing business with this provider during the next year?

Given that there is a need, how likely is it that your firm will

continue doing business with this provider during the next 3 to

5 years?

Organizational Communication Effectiveness (Judge and Elenkov2005), C.R.= .93, =.93, AVE=.81, Loadings range=.89.91

The flow of communication in our company between top executives,

managers, and staff is highly effective.

In our company, communication always occurs in a very timely

fashion.

Communication flows effectively across our companys

organizational and functional units.

Transnational Relationship Structure: This provider maintains in-

country employees to service our company.

Global Relationship Scope: This provider delivers services to our

company in more than one country.

C.R. = Construct Reliability, = Cronbachs alpha, AVE = average

variance extracted. Statistics for reliability and validity for each

measure exceeded recommended thresholds in all 5 countries;

statistics for each country are available from the authors upon

request.

References

Achrol, R., & Etzel, M. (2003). The structure of reseller goals and

performance in marketing channels. Journal of the Academy of

Marketing Science, 31(2), 146163.



17/18

Atuahene-Gima, K., Slater, S., & Olson, E. (2005). The contingent

value of responsive and proactive market orientations for new

product program performance. Journal of Product Innovation

Management, 22, 464482.

Agustin, C., & Singh, J. (2005). Curvilinear effects of consumer

loyalty determinants in relational exchanges.Journal of Marketing

Research, 42(1), 96108.

Baron, R., & Kenny, D. (1986). The moderator-mediator variable

distinction in social psychological research: conceptual, strategic,

and statistical considerations. Journal of Personality and Social

Psychology, 5, 11731182.

Baumgartner, H., & Steenkamp, J. B. E. M. (2006). An extended

paradigm for measurement analysis of marketing constructs

applicable to panel data. Journal of Marketing Research, 43,

431442.

Beverland, M., & Lockshin, L. (2003). A longitudinal study of

customers desired value change in business markets. Industrial

Marketing Management, 32(8), 653666.

Beverland, M., Farrelly, F., & Woodhatch, Z. (2004). The role of value

change management in relationship dissolution: hygiene and

motivational factors. Journal of Marketing Management, 20(9/

10), 927939.

Beverland, M., Farrelly, F., & Woodhatch, Z. (2007). Exploring the

dimensions of proactivity within advertising agency-client

relationships. Journal of Advertising, 36(4), 4960.

Bitner, M. J., Gwinner, K., & Gremler, D. (1998). Relational benefits

in services industries: the customers perspective. Journal of the

Academy of Marketing Science, 26(2), 101114.

Bollen, K. (1989). Structural equations with latent variables. New

York: John Wiley.

Cohen, P., Cohen, J., West, S., & Aiken, L. (2003). Applied multiple

regression/correlation analysis for the behavioral sciences.

Mahwah: Erlbaum Associates.

Cortina, J., Chen, G., & Dunlap, W. (2001). Testing interaction effects

in lisrel: examination and illustration of available procedures.

Organizational Research Methods, 4(4), 324360.

Day, G. (1994). The capabilities of market-driven organizations.

Journal of Marketing, 58, 3752.

Day, G. (2000). Managing market relationships. Journal of the

Academy of Marketing Science, 28(1), 2430.

Day, G., & Wensley, R. (1988). Assessing advantage: a framework

for diagnosing competitive superiority. Journal of Marketing,

52(2), 120.

Deshpand, R., Farley, J., & Webster, F. (1993). Corporate culture,

customer orientation, and innovativeness in Japanese firms: a

quadrad analysis. Journal of Marketing, 57(1), 2337.

Digital Planet (2006). The global information economy.World Informa-

tion Technology and Services Alliance, Global Insight Inc.

Doney, P., & Cannon, J. (1997). An examination of the nature of trust

in buyer-seller relationships. Journal of Marketing, 61(2), 3552.

Eggert, A., Ulaga, W., & Schultz, F. (2006). Value creation in the

relationship life cycle: a quasi-longitudinal analysis. Industrial


Flint, D., Woodruff, R., & Gardial, S. (2002). Exploring thephenomenon of customers desired value change in a business-

to-business context. Journal of Marketing, 66(4), 102117.

Flint, D., Larsson, E., & Gammelgaard, B. (2008). Exploring

processes for customer value insights, supply chain learning

and innovation: an international study. Journal of Business

Logistics, 29(1), 257281.

Fornell, C., & Larcker, D. (1981). Evaluating structural equation

models with unobservable variables and measurement error.

Journal of Marketing Research, 28, 3950.

Fornell, C., Johnson, M., Anderson, E., Jaesung, C., & Bryant, B.

(1996). The American customer satisfaction index: nature,

purpose and findings. Journal of Marketing, 60, 718.

Fornell, C., Mithas, S., Morgeson, F. V., & Krishnan, M. S. (2006).

Customer satisfaction and stock prices: high returns, low risk.

Journal of Marketing, 70(1), 314.

Ganesh, J., Arnold, M., & Reynolds, K. (2000). Understanding the

customer base of service providers: an examination of the

differences between switchers and stayers. Journal of Marketing,

64(3), 6587.

Gao, T., Sirgy, M. J., & Bird, M. (2005). Enriching customer value

research with a relational perspective: evidence from an empirical

investigation of organizational buyersvalue perceptions.Journal

of Relationship Marketing, 4(1/2), 2140.

Gassenheimer, J. B., Houston, F. S., & Davis, C. J. (1998). The role of

economic value, social value, and perceptions of fairness in

interorganizational relationship retention decisions. Journal of

the Academy of Marketing Science, 26(4), 322337.

Gremler, D. D., & Gwinner, K. (2000). Customer-employee rapport

in service relationships. Journal of Service Research, 3(1), 82104.

Hagberg-Andersson, A. (2006). Does adaptation pay off? Industrial

Marketing Management, 35, 202209.

Harvey, M. G., Novicevic, M., Hench, T., & Myers, M. (2003). Global

account management: a supply-side managerial view. Industrial


Herzberg, F. (1966). Work and the nature of man. Cleveland: World

Publishing Company.

Hofstede, G. (2001). Cultures consequences: comparing values,

behaviors, institutions and organizations across nations (2nd

ed.). Thousand Oaks: Sage.

Homburg, C., Krohmer, H., Cannon, J., & Kiedaisch, I. (2002). Customer

satisfactio

3. blocker, flint, myers, slater - proactive customer orientation and its role for creating customer...

Documents