Link Between Customer Orientation And
...M.E. Sharpe, Inc. All rights reserved.
ISSN 1069-6679 / 2007 $9.50 + 0.00.
DOI 10.2753/MTP1069-6679150301
A long-standing marketing principle is that understanding
and satisfying customers leads to superior business results.
Two firms illustrate this principle. Whirlpool discovered
certain customers wanted stylish washers and dryers, and
were willing to pay a premium for them. Consequently,
Whirlpool developed a line of high-end designer washers
and dryers. The products were so well received that they
helped generate record revenues for the firm, with customers
placing back orders on sold-out models (BusinessWeek
2004). Similarly, IBM identified a growing demand for
information technology (IT) and support services among
large as well as small businesses. In response, IBM created
and offered a portfolio of complete e-systems solutions.
Not only did the move reduce the firm’s dependence on the
hardware business but also sales of the e-systems helped
reverse its financial decline (Massey, Montoya-Weiss, and
Holcom 2001).
These and other examples suggest that attentiveness to
customers, or customer orientation, reaps large rewards. Curiously,
however, empirical support is very mixed. Studies
show that customer orientation has positive, neutral, and
even negative ties with profitability, sales growth, customer
retention, and other indicators of business performance
(e.g., Appiah-Adu and Singh 1998; Balakrishnan 1996; Voss
and Voss 2000). Given the popular appeal of customer orientation,
but lack of consistent evidence of its performance
benefits, we reexamine the customer orientation–business
performance relationship. The purpose of our study is to
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