The Effect of Economic and Social Satisfaction on Partner Trust

In the B2B research literature both perceived value from a relationship with a partner and satisfaction from the relationship over time have been viewed as playing important roles in improving loyalty intentions (Johnson et al. 2006), behavioral intentions (Mittal et al. 1999, 2001), and trust (Friman et al. 2002; Selnes 1998; Ulaga and Eggert 2006). Since extant research predominantly provides a cross-sectional understanding of customer satisfaction (e.g., Geyskens and Steenkamp 2000; Johnson et al. 2006), the present study aims to bolster this literature by investigating customer satisfaction from a longitudinal perspective. To summarize, this study looks at the relationships among perceived value, satisfaction, and trust. In addition, this study evaluates two types of satisfaction (economic and social) previously outlined in the literature as possible mediators of the value-trust relationship. We define economic satisfaction as “a channel member’s evaluation of economic outcomes that flow from the relationship with its partner such as sales volume, margins, and discounts” (Geyskens and Steenkamp 2000, p. 13). An economically satisfied channel member is willing to consider the relationship a success with respect to goal attainment, productivity, and financial outcomes (Geyskens et al. 1999). On the other hand, social satisfaction reflects a channel member’s evaluation of the extent to which interactions with the exchange partner are fulfilling, gratifying, or facile (Geyskens and Steenkamp 2000). We propose that perceived value builds partner trust both directly and indirectly through the evaluation of both economic and social satisfaction. Since trust evolves over time (Bart et al. 2005), our model employs longitudinal data in order to evaluate the proposed relationships. The sampling frame included a list of market participants obtained from Techno-park and Electronic Land, the central markets of the electronic industry in Seoul, South Korea. Data for this study was generated from a longitudinal survey of channel relationships between 431 channel participants (shop owners and their partners). The original questionnaires at time point T were dropped off and picked up by the interviewers in the spring of 2010. After a review for missing items and careless responses, 236 useable questionnaires were collected. At time T+1 (which occurred 24 months after the initial survey), the same questionnaire was sent to the original participants via emails. Telephone follow-ups were conducted after a month and this helped boost response rates. These procedures resulted in 179 usable questionnaires. Thus, 75.8% of respondents who participated at time point T returned the follow-up questionnaires. Of 179 respondents, 41% were electronic shop owners and 59% were small and medium-size companies. Findings indicate that the relationship between economic satisfaction and partner trust becomes less strong over time. Meanwhile, the effect of social satisfaction on partner trust becomes stronger over time and plays a significant role in enhancing trust between two parties. Thus social satisfaction is a key factor in sustaining a channel partnership over time after initial perceived value has been enhanced via the economic satisfaction route. Results further show that temporal effects are involved in all three relationships related to how perceived value affects satisfaction and trust (e.g., perceived value→ economic satisfaction, perceived value→ social satisfaction and perceived value→ partner trust). The effect of perceived value dramatically decreases from time point T to T+1, indicating that these relationships exhibit significant temporal downward effects over time. These results provide important implications for channel members working toward enhancing trust with partners. In initial stages of a relationship, channel members should concentrate their marketing resources on enhancing economic satisfaction. As channel relationships evolve, the role of social satisfaction becomes more crucial and thus a greater focus on activities aimed at enhancing social satisfaction would be prudent. Furthermore, the strong positive carryover effects found in this study illustrate the added value of engaging in and maintaining longer-term relationships. Thus, channel members should continually re-evaluate and redesign social interactions strategically during the course of a relationship with a business partner in order to enhance overall satisfaction and trust within the relationship.