Drivers of contract renewal over time: a framework of analysis in B2B services

Abstract

Despite the wealth of research into Business-to-Business customer relationships, there are a number of gaps in the literature, where most studies have used cross-sectional research designs. In this study, we explored customer relationships over a three-year period, using data from a large Fortune 100 industrial services provider. Our longitudinal research design compared the drivers of customer satisfaction and contract renewal decisions over time, and provides a holistic framework for viewing customer relationship drivers and their effects at an aggregate level. While some drivers were quite stable, others changed significantly between quarters. The main implications of this study are that firms should closely manage their supplier–customer relationships by tracking the drivers over time to enable service responsiveness to changing customer needs. From a theoretical perspective, the data also indicate that researchers should be cautious in drawing concrete conclusions from cross-sectional studies, as many drivers are dynamic over time. Future researchers are encouraged to develop more longitudinal research designs.