IMM-07302; No of Pages 8

Industrial Marketing Management xxx (2015) xxxxxx

Contents lists available at ScienceDirect

Industrial Marketing Management

Functional, emotional, and social benets of new B2B services

Marina Candi a,, Kenneth B. Kahn b
a
b

Reykjavik University Center for Research on Innovation and Entrepreneurship, Reykjavik University, School of Business, Menntavegur 1, 101 Reykjavik, Iceland
VCU da Vinci Center, Virginia Commonwealth University, 807 S. Cathedral Place, Richmond, VA 23284-4000, USA

a r t i c l e

i n f o

Article history:
Received 23 February 2015
Received in revised form 26 January 2016
Accepted 3 February 2016
Available online xxxx
Keywords:
Service benets
Functional benets
Emotional benets
Social benets
Customer satisfaction
Service innovation

a b s t r a c t
While marketing literature has dened the benets concept broadly, there is limited empirical research clarifying
what benets constitute and how they contribute to customer satisfaction in the B2B service context. Benets
have typically been characterized as falling under a single, all-encompassing concept, but emerging thinking
views them as multi-dimensional, including functional, emotional and social benets. This research examines
whether this demarcation applies in the B2B services context, and if so, how these three types of benets are
related with customer satisfaction. Based on a survey of 335 customers of recently launched B2B services, the
demarcation of these three types of benets appears warranted and each type of benet exhibits a different
pattern of relationship with customer satisfaction. Functional benets are found to be positively related with
customer satisfaction, while emotional benets and social benets exhibit non-linear relationships. Emotional
benets have a diminishing effect on customer satisfaction as they increase and social benets reach a plateau
after a threshold point. These results suggest that recognizing the three types of benets and the different shapes
of their relationships with customer satisfaction can result in effective strategies for driving customer satisfaction
when innovating new B2B services. Managerial and research implications are discussed.
2016 Elsevier Inc. All rights reserved.

1. Introduction
Businesses across the world are increasingly focused on services due
to their growing prevalence and importance in today's marketplace
(Raddats & Easingwood, 2010; Galston, 2015). This focus results in an
increased emphasis on service innovation in B2B contexts, recognized
as essential to achieve competitive advantage in industrial markets
(Rae, Fudge, & Hudson, 2012).
The prescribed approach to service innovation is to be customercentric and address benets that solve customer problems, which will
in turn deliver greater customer satisfaction (Kuczmarski & Mandolia,
2013). Benets, dened as the fundamental need or want that customers
satisfy when consuming a product or service (Kotler, 2003), are integral to
customer value creation (Zeithaml, 1988), play a requisite role in
customer satisfaction (Lindgreen & Wynstra, 2005), and are a fundamental focus of service innovation (Kotler, 2003; Kuczmarski & Mandolia,
2013). However, the specics of how benets contribute in the B2B
service context remain largely unexamined as most literature to-date
has focused on benets in the nal consumer (B2C) context.
An emergent theme about benets is that they appear to be
multi-dimensional rather than falling comfortably under a single,
all-encompassing concept. A number of researchers, e.g. Boksberger
and Melsen (2011), Lapierre (2000), Macdonald, Wilson, Martinez,

Corresponding author.
E-mail addresses: marina@ru.is (M. Candi), kbkahn@vcu.edu (K.B. Kahn).

and Toossi (2011) and Day and Crask (2000), advocate for a multidimensional approach to value, which encompasses benets. The literature indicates that three types of benets should be taken into account:
functional benets, emotional benets and social benets. Of these three
types, functional benets have traditionally received the most attention,
particularly in B2B contexts, e.g. factors such as speed, efciency, and
cost (Qualls & Rosa, 1995). Emotional benets, which pertain to
emotion, and social benets, which correspond to self-identity or
self-image, remain largely overlooked in examinations of B2B service
innovation. Therefore, this research poses two questions: (1) Does a
demarcation of functional, emotional, and social benets apply in
the B2B service context? (2) If so, how do these three types of benets
contribute to customer satisfaction?
Conducting research to examine contributions of benets to
customer satisfaction has the potential to point to effective strategies
for driving customer satisfaction when innovating B2B services. The
examination of functional, emotional and social benets and their
potential contributions to customer satisfaction forms the basis for
providing recommendations about how to maximize customer satisfaction through strategic combinations of benets in service innovation
and provide guidance to practitioners about where to focus efforts.
Furthermore, the study of emotional and social benets addresses calls
by Prior (2013), whose work provides evidence of their relevance to the
B2B service context. In addition, this research addresses calls by Cova
and Salle (2008) and Lowe and Hwang (2012) to look beyond the B2B
versus B2C dichotomy and strive for cross-fertilization between consumer
theory and industrial marketing theory.

http://dx.doi.org/10.1016/j.indmarman.2016.02.002
0019-8501/ 2016 Elsevier Inc. All rights reserved.

Please cite this article as: Candi, M., & Kahn, K.B., Functional, emotional, and social benets of new B2B services, Industrial Marketing Management
(2015), http://dx.doi.org/10.1016/j.indmarman.2016.02.002

M. Candi, K.B. Kahn / Industrial Marketing Management xxx (2015) xxxxxx

We begin by describing what benets constitute and then discuss a

framework that suggests the nature of the contribution of B2B service
benets to customer satisfaction. Results of analysis using data collected
from 335 customers of newly launched B2B services follow. The paper
concludes with theoretical and managerial implications surrounding
new B2B services.
2. Literature review
2.1. Benets concept
As the fulllment of customer needs or wants (Kotler, 2003), benets
come into being within the customer, are abstract in nature, and are often
derived from attributes; conversely, attributes reside in a product or
service and are more concrete or tangible in nature than benets
(Vriens & Ter Hofstede, 2000). A number of typologies have offered
varying characterizations of benets for a product or service, but there
is general concordance with Kotler's denition that benets represent
needs or wants that are satised when consuming a product or service.
Another point with general consensus is that multiple benets are typically satised when consuming a product or service (Day & Crask,
2000; Swan & Combs, 1976).
One of the earliest typologies of benets was offered by Park,
Jaworski, and MacInnis (1986), who classied benets as functional,
experiential, or symbolic in nature. In Park et al.s typology, functional
benets represent the satisfaction of intrinsic needs through product
or service attributes. These benets generally fulll basic needs such
as physiological and safety needs (Maslow, 1970) and the removal or
avoidance of problems (Fernell, 1978; Rossiter & Percy, 1987). Experiential benets relate to how a product or service, or its use, appeals to
the senses and the emotions that are stimulated. Symbolic benets are
more extrinsic than functional and experiential benets because fulllment comes from elements that are not necessarily related directly to a
product or service, such as type of users and advertising, and include
such aspects as social approval, personal expression or self-esteem.
Symbolic benets are likely to be especially relevant for socially
visible, badge products (Keller, 1993, p. 4) to promote prestige,
exclusivity, or fashionability because of how this type of benet relates to self-image.
Later typologies have reected similar dimensions of functional,
emotional, and social benets. For example, the typology proposed by
Sheth, Newman, and Gross (1991) includes functional the perceived
utility acquired due to a product's ability to perform its functional, utilitarian, or physical purposes, emotional the perceived utility resulting
from a product's ability to arouse feelings or epistemic states, and social
the perceived utility resulting from a product's association with one
or more specic social groups. This typology also includes two additional dimensions: epistemic the perceived utility acquired as a result of a
product's ability to arouse curiosity, provide novelty, and/or satisfy a desire for knowledge, and conditional the perceived utility gained as a
result of the specic situation or context faced. Richins (1994) typology
of product meaning similarly includes the utilitarian dimension, enjoyment, interpersonal relatedness and identity/self-expression, where interpersonal relatedness refers to the capability of products to symbolize
social relationships and represent interpersonal ties.
Christensen, Cook, and Hall (2006) advocate for three types of
benets, indicating that a product's functional, emotional, and social
dimensions have a predominant inuence on customer satisfaction
and the overall customer experience. Further support for a typology of
three types of benets comes from Norman (2004), who argues that
developing new products requires attention to behavioral (functional)
design, visceral design to appeal to the human senses, and reective
design to create emotional value and symbolic cues. Schmitt (2004)
argues that experiences consist of sense, feel, think, act and relate
elements, where think and act correspond to a rational, functionallyoriented approach to products, sense and feel are about the hedonic or

emotional approach and relate refers to self-identity aspects. In research

specically on the design of services, including B2B services, Candi
(2007) draws on Norman's (2004) typology and identies functional,
visceral and experiential design as relevant for the development of
new services. Building on Candi's (2007) arguments, we can surmise
that visceral design yields emotional benets while experiential design
yields social benets.
Hence, we posit that functional benets, emotional benets and social
benets capture the essence of the existing typologies outlined above.
Functional benets are benets that derive from a given service being
able to perform its functional, utilitarian, or practical purposes (Sheth
et al., 1991). This portrays functional benets as pertaining to the
basic service offered, comprising the issues of solving a problem
customers have, and doing things customers would not be able to do
without the help of the service (Stock, 2011).
Emotional benets are benets that appeal to the human senses and
evoke emotions (Holbrook & Hirschman, 1982). Because services tend
to be multi-faceted, the emotional customer experience is pertinent
and recognizes that sensory or affective gratication plays an important
role in customer satisfaction just like the fulllment of functional
requirements (e.g. Batra & Ahtola, 1990). Yamamoto and Lambert
(1994) nd that even for industrial products, the impact of esthetics,
which contribute to an emotional response (Beltagui, Darler, & Candi,
2015) is signicant.
Social benets are benets that resonate with or support a customer's
actual or desired self-image and their membership in, or desire to
belong to, specic groups (Mittal & Lee, 1989). This can be relative to
the individual, relative to the rm the individual represents, or even
relative to a rm's brand (e.g. Glynn, 2010). Social benets stem from
humans' strong need for self-expression (Verganti, 2008; Norman,
2004). This includes the need to express their identity or their membership in a specic group using clues, symbols, messages and other signals
(Schmitt, 2004). Indeed, the inuence of others whether they are
peers or superiors can constitute a strong force (Compeau & Higgins,
1995) and the importance of customer communities in the B2B context
is growing (Bruhn, Schnebelen, & Schafer, 2014).
2.2. Benets and customer satisfaction
Benets and customer satisfaction are two core concepts subsumed
within customer value frameworks (e.g. Lindgreen, Hingley, Grant, &
Morgan, 2012; Ulaga, 2001; Lindgreen & Wynstra, 2005), with literature
presenting customer-perceived value as a trade-off between benets
and sacrices perceived by the customer (Ulaga & Chacour, 2001).
Furthermore, the trade-off between benets and sacrices may not be
restricted to the single episode level, and customer-perceived value
may need to take into account multiple episode benets for a total
episode value (Ravald & Grnroos, 1996). A general premise surmised
from the theory formulating these frameworks is that situations in
which benets are appreciable will correspond to increased perceived
value and likely include an outcome of higher customer satisfaction
(cf. Day & Crask, 2000), where customer satisfaction represents a
post-purchase and post-use evaluation at a particular point in time
(Snchez-Fernndez & Iniesta-Bonillo, 2006).
Categorization of benets as functional benets, emotional benets,
and social benets represents an augmentation of customer value theory, particularly in the B2B context. Examining how these three types of
benets contribute to customer satisfaction is a further enhancement to
such theory. Hypotheses pertaining to how each of these three types of
benets inuences customer satisfaction in the B2B service context are
developed below.
Turning rst to functional benets, research ndings suggest
that performance and functionality are the primary motivations for
the selection of B2B services (Lilien et al., 2010), with earlier research
characterizing functional benets as goals that ought to be met because
functional benets are manifested when things get done, or value in

Please cite this article as: Candi, M., & Kahn, K.B., Functional, emotional, and social benets of new B2B services, Industrial Marketing Management
(2015), http://dx.doi.org/10.1016/j.indmarman.2016.02.002

M. Candi, K.B. Kahn / Industrial Marketing Management xxx (2015) xxxxxx

use (Miles, 1961). This suggests that customer satisfaction will be

related with perceptions of functional benets. When a service
allows for more things to be done, a higher level of functional benets
will be perceived, and correspondingly, customer satisfaction should
be higher. An implication is that functional benets in the B2B service
context will be positively related with customer satisfaction because
increased functional performance will tend to heighten customer satisfaction. This stems from the contract-orientation and specicationsorientation that characterize exchanges among B2B rms, where
service functional benets must meet given specications. Exceeding
these specications will exceed expectations, appear to provide greater
value to the customer, and be more satisfying in nature. The following
hypothesis about the relationship between functional benets and
customer satisfaction in the B2B service context is proposed:
H1. : Functional benets are positively related with customer satisfaction
in B2B service contexts.
While functional benets are sometimes referred to as fullling
prevention goals through their ability to prevent something
unwanted, e.g. lack of safety emotional benets are referred to as
fullling promotion goals that reect people's aspirations (Chitturi,
Raghunathan, & Mahajan, 2008). Existing research in the consumer
context suggests that evoking an emotional response contributes to
performance (Norman, 2004). According to Chitturi et al. (2008),
once functional requirements are met, customers focus on continued
fulllment of promotion goals brought about by hedonic benets.
Indeed, emotions may be more pertinent in the service experience
than reason (Beltagui, Candi, & Riedel, 2012; Mittal, 1988; Mittal,
Ross, & Baldasare, 1998). Although emotional benets have been
less studied in B2B contexts, there is research that compares their
importance in B2B and B2C contexts and nds similar patterns in
both (Yamamoto & Lambert, 1994; Candi & Saemundsson, 2011).
There is also some research specically in the B2B context that points
to the importance of emotional value, such as that of Prior (2013),
who argues that the appraisal of value in industrial contexts may
not always be a purely rational process. Similarly, Boksberger and
Melsen (2011) argue that emotions such as pleasure and arousal
are important factors in customers' perceived value of services.
Hence, emotional benets are hypothesized to be positively related
with customer satisfaction, formally stated:
H2. : Emotional benets are positively related with customer satisfaction
in B2B service contexts.
Allen and Ng (1999) argue that nal customers' preferences will
be inuenced by the values they hold and that these values include
concerns about identity. They further argue that when customers
make evaluations based on functionality they tend to make judgments
based on tangible attributes. When evaluations are based on social
benets, customers tend to make affective judgments. In the B2B
context, Prior (2013) argues that value in use can be social as well as
emotional. For example, a company's use of the mainstream SAP
enterprise resource planning system has the potential to portray
that company as being advanced in its organization and planning
(Francalanci, 2001). Research in B2B brand communities by Bruhn
et al. (2014) concludes that B2B customers value and seek out social
benets.
While decision-makers in B2B contexts can be individuals or a group
of people, these decision-makers are more likely to view social benets
relative to their business than to themselves as individuals. The decision
to use a particular service in B2B contexts is not primarily a personal one
that pertains to an individual's self-image or membership in a group.
However, work by Lemke, Clark, and Wilson (2011), which examines
differences in the customer experience quality in B2B and B2C contexts,
indicates that in B2B contexts, customers are interested in whether a
supplier delivers not just the attributes sought, but also supplants the

customer's own identity objectives. This afrms that social benets

are likely to contribute to customer satisfaction in B2B contexts and
the third hypothesis is stated as follows:
H3. : Social benets are positively related with customer satisfaction in
B2B service contexts.

3. Methodology
To examine the effects of service benets on customer satisfaction, a
survey among actual recent customers of newly launched B2B services
was deemed an appropriate data collection methodology. A total of 42
Northern European service rms that had launched a new B2B service
within the last year participated in the research. The services came
from a broad range of sectors as summarized in Table 1. The rms
employed from 1 to 200 employees, with an average size of 16
employees. Hence, the sample of participating rms can be classed as
small to medium sized enterprises (SMEs). These rms were relatively
young, ranging in age from 3 to 17 years with an average age of
10 years from founding.
Each of the participating rms made customer lists available for use
in this research. For each customer on the list, an informant who was an
active user of the specic newly launched service was identied. This
ensured that each informant was qualied to respond to the survey.
To further conrm qualications, the survey started with a question
about whether the respondent had used the service in question and
felt knowledgeable about the service. Since the research focused on
newly launched services, the lengths of the B2B relationships with
respect to the services studied were uniformly short. A total of 1678
business customer names and email addresses were provided. In return
for providing this information, the companies received detailed results
of the ndings for their rms' newly launched services.
The survey was pilot tested by about 100 customers and minor
adjustments in wording were made based on pilot testers' comments.
Following pilot testing, emails were sent to the lists of customers
provided by the participating rms requesting that they ll in an online survey about a particular new service, which they had used. Up to
two reminder emails were sent to those customers that did not respond.
A total of 378 responses were received (23% response rate). This represents a very good response rate for an Internet-based survey. Responses
in which respondents indicated that they were not familiar with the service in question and responses exhibiting severe outlier characteristics,
potentially caused by frivolous response behavior, were omitted from
analysis, resulting in a nal sample size of 335 and a usable response
rate of 20%.
An instrument for assessing benets that customers gain from a
service was developed based on the work of Park et al. (1986). A total
of fteen survey items were formulated as Likert-type statements
with possible responses from 1 (disagree) to 5 (agree). Exploratory
factor analysis using primary components and varimax rotation was
conducted using Stata 13.1. Three items loading poorly or having
substantial cross-loadings were discarded in a process of scale renement.

Table 1
Groups of industry sectors represented in the data.
Group of sectors
R&D services, testing
Technical services, e.g. equipment maintenance,
transport, distribution
Enterprise solutions, software as services (SAS)
Consulting services, e.g. engineering, architecture
Ofce services, e.g. printing and supplies
Software development

Percentage
of sample
10%
10%
18%
18%
21%
23%

Please cite this article as: Candi, M., & Kahn, K.B., Functional, emotional, and social benets of new B2B services, Industrial Marketing Management
(2015), http://dx.doi.org/10.1016/j.indmarman.2016.02.002

M. Candi, K.B. Kahn / Industrial Marketing Management xxx (2015) xxxxxx

The result was twelve items loading on three variables, one for functional
benets, one for emotional benets, and one for social benets. The split
between functional benets and the other two types of benets is in
line with existing research on utilitarian and hedonic product benets
(e.g. Batra & Ahtola, 1990; Voss, Spangenberg, & Grohmann, 2003; Swan
& Combs, 1976). The split between emotional benets and social benets
conrms that these are separate concepts for B2B services and that
customers are likely to ascribe different levels of value to them, as has
been found for products (Sheth et al., 1991; Sweeney & Soutar, 2001).
It is noted that while B2B customers can be expected to be more
rational in their evaluations of services than end consumers, the persons
responding to the survey might derive pleasure and/or stature from
using a procured B2B service. This human element lies at the core of
the notion that emotional benets and social benets can matter in
the B2B context similarly to what has been conrmed in the B2C
context.
Customer satisfaction was measured using two items based on Hui,
Zhao, Fan, and Au (2004), asking how satised customers were with
the service in question and how likely they would be to recommend
the service to someone else. Both questions had possible answers
from 1 (not satised at all, not very likely) to 5 (very satised, very
likely).
The measurement model was tested using conrmatory factor analysis (CFA) in Stata 13.1 and yielded very good t indices (Shah &
Goldstein, 2006) with 2 = 108 (68 degrees of freedom), root mean
squared error of approximation (RMSEA) = 0.042, comparative t
index (CFI) = 0.99 and TuckerLewis index (TLI) = 0.98. The loadings,
composite reliabilities, and average variances extracted are shown in
Table 2. Composite reliabilities are all well over the generally accepted
cutoff of 0.7. This indicates that the items sufciently represent the
variables. Similarly, average variances extracted were all above the
generally accepted cutoff of 0.5. This indicates that a large proportion
of the variance is captured by each variable rather than measurement
error.
Various procedural remedies were used to minimize common
method bias as recommended by Podsakoff, MacKenzie, and Podsakoff
(2003). The introduction to the survey emphasized that there were no
right or wrong answers and respondents were promised anonymity.
The survey items were carefully constructed to avoid ambiguity, terminology that might not be understood, long question texts and doublebarreled questions. Although there are no denitive statistical tests for
common method bias (Podsakoff et al., 2003) a Harman's single-factor
test was conducted in which all the items making up the independent
variables were included in factor analysis. This resulted in the expected

Table 2
Reliability and validity of measures.
Variable

Items

Functional
service
benets

X solves a problem my company is faced

with
X saves time
X saves effort
X provides comfort
X is esthetically pleasing
X creates a compelling experience
X gives pleasure
X makes me feel good
X is enjoyable
My company gains prestige by using X
My company communicates a specic
self-image by using X
My company feels that it belongs to a
specic group by using X
I am satised with X
I recommend X to others

Emotional
service
benets

Social service
benets

Customer
satisfaction

Loading
()

CR

AVE

0.75 0.88 0.64

0.74
0.80
0.91
0.74 0.94 0.74
0.90
0.89
0.89
0.87
0.90 0.93 0.81
0.94
0.87
0.77 0.87 0.77
0.97

Notes: CR = composite reliability, AVE = average variance extracted.

three factors, providing evidence that common method bias was not
likely a problem.
4. Results and discussion
Structural equation modeling using Stata 13.1 was employed to
analyze the dataset. Prior to applying this analysis, summary statistics
for each of the study's variables along with pairwise correlations
between variables were evaluated (see Table 3). Squared correlations
were compared with average variances extracted (AVEs) and since all
squared correlations were smaller than the respective AVEs, discriminant validity was supported (Hair, Black, Babin, & Anderson, 2010;
Anderson & Gerbing, 1988).
The possibility of multi-collinearity was examined in accordance
with the guidelines presented by Grewal, Cote, and Baumgartner
(2004) for detecting potential multi-collinearity across various ranges
of correlations between independent variables. Grewal et al. (2004)
show that provided reliability is strong (over 0.7), R2 is acceptable
(the structural model had an R2 of 0.59), and sample size is sufciently
large, multi-collinearity is not likely to be a problem. Variance ination
factors were also examined. The highest variance ination factor was
found to be 1.55, which is well below the conservative threshold of 5
(Marquardt, 1970). Based on this analysis, it was surmised that multicollinearity was not likely a problem.
Table 4 presents the results of the structural equation model analysis. As shown, all three types of benets have a statistically signicant
relationship with customer satisfaction. These results provide evidence
in support of hypotheses H1, H2, and H3. Since Table 4 shows standardized coefcients, the contributions of each of the three types of benets
can be compared and we note that the contribution of functional benets is strongest, which is not surprising for B2B services.
Various tests were conducted to examine the robustness of the
structural model. Because a wide range of sectors was represented in
the data, a regression analysis including dummy variables for each of
the groups of industry sectors in the sample was run. None of the
dummy variables were statistically signicant, indicating an absence
of industry effects and suggesting generalizability of ndings across
the B2B service sectors represented.
Another robustness test involved examining partial residual plots to
examine the possible existence of second-order relationships between
each type of benet and customer satisfaction. In fact, nonlinear
relationships in models including customer satisfaction have been
suggested by the literature (e.g. Anderson & Mittal, 2000), but there is
no clear consensus about the shapes of these relationships. This examination led to the conclusion that there might be second-order relationships, leading to two additional procedures being applied. Group
variables for each of the three types of benets were introduced in the
structural model to separate responses into above or below average
groups. Each grouping variable was added to a fully constrained
model in which all coefcients, covariances, and loadings were forced
to be equal across the two groups (Bollen, 1989). Constraints were
then lifted so that coefcients, covariances, and loadings for the grouping variable of interest were allowed to differ between the groups. The

Table 3
Summary statistics and correlations.
Variable
1
2
3
4

Functional service
benets
Emotional service
benets
Social service benets
Customer satisfaction

Mean

Std.dev.

2.98

0.69

0.64

0.28

0.25

0.32

2.52
2.83
3.5

0.82
0.93
0.81

0.53
0.50
0.57

0.74
0.66
0.55

0.44
0.81
0.54

0.30
0.29
0.77

Notes: average variances extracted are shown diagonally in bold. Pairwise correlations are
shown in the left side of the matrix and squared correlations are shown in the right side of
the matrix.

Please cite this article as: Candi, M., & Kahn, K.B., Functional, emotional, and social benets of new B2B services, Industrial Marketing Management
(2015), http://dx.doi.org/10.1016/j.indmarman.2016.02.002

M. Candi, K.B. Kahn / Industrial Marketing Management xxx (2015) xxxxxx

Table 4
Results of structural equation model analysis.
Standardized coef.

Std.err.

PNz

0.415
0.259
0.199

0.089
0.104
0.095

4.690
2.500
2.100

0.000
0.012
0.036

Functional service benets customer satisfaction

Emotional service benets customer satisfaction
Social service benets customer satisfaction

Notes: model t statistics: 2 = 125, d.f. = 68, root mean squared error of approximation (RMSEA) = 0.05, Comparative t index (CFI) = 0.98, TuckerLewis index/non-normed t index
(TLI/NNFI) = 0.97, Coefcient of determination (CD) = 0.99, standardized root mean squared residual (SRMR) = 0.04.
p b 0.05.
p b 0.01.

results showed statistically signicant differences in 2 values between

each pair of constrained and unconstrained models, suggesting possible
nonlinear relationships.
To further probe the second-order relationships, ordinary least
squares (OLS) regression was employed. A squared variable for
each type of benet was included in the model along with the original variables. The results of OLS are shown in Table 5.
The squared coefcient for functional benets was not statistically
signicant, indicating that the relationship between functional benets
and customer satisfaction remains linear for both low and high perceived levels of functional benets. In contrast, the squared variables
for emotional benets and social benets were found to be statistically
signicant, indicating the existence of nonlinear relationships between
these latter two types of benets and customer satisfaction. It appears
that there are contingencies to hypotheses H2 and H3 in that the shapes
of the relationships between emotional benets and social benets,
respectively, and customer satisfaction vary depending on the level of
emotional and social benets.
To examine the nature of each benet's relationship with customer
satisfaction, each relationship was standardized and graphed to examine relationships at the mean, one standard deviation, and two standard
deviations above and below the mean for each type of benet. This
range was selected to reect the actual values present in the data. As
shown in Fig. 1, functional benets display a relatively uniform, linear
relationship with customer satisfaction. Emotional benets and social
benets contribute most strongly to customer satisfaction in the range
from 2 standard deviations below the mean to about 0.5 standard deviations below the mean. These contributions become less marked in the
range from about 0.5 standard deviations below the mean to about 0.5
standard deviations above the mean. At higher levels, the contributions
of both emotional and social benets level off. The contribution of emotional benets turns slightly negative when emotional benets are more
than about 1.5 standard deviations above the mean. The contribution of
social benets stays basically level up to 2 standard deviations above the
mean. In sum, these results suggest that emotional benets may have a
diminishing effect at higher levels, whereas the effects of social benets
plateau after a certain level.

outcome of customer satisfaction. Two research questions were

addressed: (1) Does a demarcation of functional, emotional, and social
benets apply in the B2B service context? (2) If so, how do these three
types of benets contribute to customer satisfaction? Empirical results
from a sample of 335 customers of 42 B2B services indicate yes to question one and indicate that each type of benet contributes to customer
satisfaction in a different way.
The research ndings clearly indicate that functional benets, emotional benets and social benets are separate and that each of these
types of benet has a statistically signicant relationship with customer
satisfaction in the B2B service context. Deeper analysis indicates that the
nature of these relationships differs among the three types of benets
and that the relationships between emotional benets and social benets,
respectively, and customer satisfaction are not linear. This augments the
existing understanding of customer value and infers the need to distinguish among different types of benets versus generalizing benets as
forming a one size ts all concept.
Functional benets were found to have a positive linear relationship
with customer satisfaction for customers of B2B services. This suggests
that a minimal level of functional benets will correlate with low levels
of customer satisfaction, and that customer satisfaction will increase as
B2B customers perceive increased functional benets. Thus, functional
benets appear to amplify B2B customer satisfaction levels. It is posited
that a focus on functional benets in the B2B service context that allows
customers to solve problems and/or do something they would not have
otherwise been able to do, is important. Functional benets also include
saving cost, time, and effort, which are essential in a business context.
Such results suggest that an emphasis on functional benets in the
B2B service innovation context is worthwhile and integral to meeting
customer requirements.
Emotional benets were found to have a statistically signicant relationship with customer satisfaction, but the research ndings indicate
that the strength of this relationship may be diminished when the

5. Conclusions
This research examined the benets of new B2B services to clarify
the nature of the benets concept and examine relationships with the

Table 5
Results of OLS including squared benets.
Standardized coef.

Std. err.

PNz

0.26
0.22
0.21
0.03
0.09
0.07

0.05
0.06
0.05
0.03
0.04
0.03

5.14
3.78
4.24
0.87
2.41
1.99

0.000
0.000
0.000
0.383
0.016
0.047

Functional benets
Emotional benets
Social benets
Functional benets2
Emotional benets2
Social benets2
Notes: R2 = 0.46, F = 40 (p = 0.00).
p b 0.05.
p b 0.01.

Fig. 1. Customer satisfaction and perceived benets.

Please cite this article as: Candi, M., & Kahn, K.B., Functional, emotional, and social benets of new B2B services, Industrial Marketing Management
(2015), http://dx.doi.org/10.1016/j.indmarman.2016.02.002

M. Candi, K.B. Kahn / Industrial Marketing Management xxx (2015) xxxxxx

perceived level of emotional benets is high. Emotions do appear

important to B2B customers and the results provide evidence that B2B
customers perceive emotional benets as a customer satisfaction
enhancer. Thus, B2B services that increasingly reect hedonic benets,
appeal to the senses, and evoke positive emotions are likely to increase
customer satisfaction. However, there appears to be a point at which increased emotional benets no longer contribute to increased customer
satisfaction and may even start detracting from customer satisfaction.
Social benets were found to be positively related with perceptions
of customer satisfaction, with the relationship reaching a plateau after a
threshold point. This suggests that customer satisfaction increases as social benets increase in the low range, inferring that lower levels of social benets are valuable in the B2B service innovation context. Given
the context of B2B services, lower level social benets connected with
the service may allow B2B customers to appreciate image benets.
This may pertain to allowing the business to resonate with or support
an actual or desired image or to connect to afliation with or membership in a specic group.
While services supporting a company's identity will provide more
satisfaction, there appears to be a point at which social benets no
longer increase customer satisfaction. It is possible that self-image and
membership afliation have a bearing on rms' branding, with too
much attention to image and membership afliation with a procured
service being perceived as interfering with a rm's own branding
and self-identity after a threshold level. There may even be a risk of
over-shadowing or compromising the company's own identity such
that the company would not nd high levels of social benets satisfying.
Services or brands that signal prestige or a valued image might be
viewed as desirable by B2B customers, but evidence suggests a limit to
how far this goes.
This research indicates that functional benets, emotional benets,
and social benets all deserve consideration in the B2B service innovation context, augmenting existing customer value frameworks. The
results also lend credence to the ndings proffered by Prior (2013),
who used netnographic data to suggest that value in use can be
emotional and social, as well as functional, in B2B contexts. Such
results suggest that acknowledging different types of benets and
their relationships with customer satisfaction may be advantageous
and offer improved understanding of customer satisfaction in the
B2B services context.
The introduction of benets as a source of customer satisfaction
provides an avenue for study that expands traditional customer
value and customer satisfaction research, which has predominantly
focused on attributes. This traditional focus on attributes in investigating customer satisfaction has mostly overlooked emotional and
social benets, as these may not be based on tangible attributes
(Snelders & Schoormans, 2004; Allen & Ng, 1999). While the inuence
of emotional benets on customer satisfaction has been recognized in
some literature, social benets are less acknowledged and overlooked
in some models (e.g. Batra & Ahtola, 1990; Voss et al., 2003). The results
of the present research suggest that image and expressing group
membership have an inuence alongside enjoyment and excitement.
The ndings that functional benets, emotional benets, and social
benets have differently shaped relationships with customer satisfaction are particularly noteworthy. Functional benets appear relevant
and essential for driving customer satisfaction in the B2B service
context. Functional benets exhibit a linear relationship with customer
satisfaction, suggesting that more functional benets correlate to
greater customer satisfaction. Emotional benets and social benets
appear important for customer satisfaction too, but only up to a certain point. The results suggest that too much emphasis on emotional
benets (high levels of emotional benets) will not lead to increased B2B customer satisfaction. Too much emphasis on social
benets also will not appreciate customer satisfaction due to a possible plateauing effect of the relationship between social benets
and customer satisfaction.

Based on the ndings of this research about relationships between

different types of benets and customer satisfaction, managers may
be able to evaluate early on in the service innovation process how a
particular combination of service benets might inuence customer
satisfaction at the time of purchase decision and where to most effectively focus their efforts. This can be accomplished by reviewing the
intended benets of the service at the beginning of the development
process. Service benets must be established at the beginning of the
development process because they are needed to drive the development activity; attributes can, and often do, emerge later in the service development process. Thus, timely understanding for
developing appropriate new service offerings may be afforded. The
key is to discern whether a particular benet is functional, emotional,
or social in nature and to understand that not all benets behave in
the same way in driving customer satisfaction.
For B2B services, the ndings suggest that the strategy of incorporating more functional benets into a service will augment customer satisfaction. This means that over-delivering in terms of functional benets
is likely to satisfy B2B customers. These results correspond to Lilien et al.
(2010), who characterize B2B customers as primarily concerned with
performance and functionality.
Emotional benets and social benets also present opportunities for
driving customer satisfaction with B2B services, but the research results
suggest the need for cautious application. Unlike functional benets, a
more is better strategy does not appear valid in the case of emotional
benets and social benets. Emotional benets make an initial contribution, but a balance is necessary because after a certain point, increased
emotional benets will no longer contribute to customer satisfaction
and could even possibly diminish it. Similarly, social benets can make
an initial contribution to customer satisfaction, but after a certain
point, the contribution plateaus.
While functional benets would appear a rather straightforward
course to take to drive customer satisfaction, the added costs of increasing functional benets must be taken into account. Greater customer
satisfaction may provide a competitive advantage, but it may not necessarily correspond to higher revenues or protability. Incorporating an
amalgamation of functional benets, emotional benets, and social
benets into B2B services may be the more appropriate and opportune
strategy.
Much research to date has attended to attributes as contributors
to customer satisfaction, but not benets. The current study's focus
on benets and the revelation that different types of benets have
different, potentially nonlinear relationships with customer satisfaction
represents an important contribution, especially when applied to the
B2B services area.
Further research dening and exploring the benets concept is
warranted, particularly in view of the limited amount of research on
benets in the B2B context and limited amount of research on the nonlinearity of relationships between various types of benets and customer satisfaction; past research has primarily posited and examined linear
relationships. A more complete analysis of the relationships between
benets and customer satisfaction could include mediator and moderator variables such as level of risk-aversion, decision-making styles, or
company culture. These analyses would provide insights into the nature
of the benets to customer satisfaction relationship.
The research results suggest that those B2B services with increasing
emotional benets are likely to increase customer satisfaction up to a
threshold point. A pending issue needing further study is whether B2B
customers are reecting their own emotional experience as a purchasing agent or extrapolating the importance of the emotional benet for
the company as a whole. In other words, does the acquisition of the
service translate into emotional benets at the level of the individual
or the level of the business?
Several limitations of the present study provide avenues for
exploration in future research. Single respondent bias is one potential limitation because data for dependent and independent variables

Please cite this article as: Candi, M., & Kahn, K.B., Functional, emotional, and social benets of new B2B services, Industrial Marketing Management
(2015), http://dx.doi.org/10.1016/j.indmarman.2016.02.002

M. Candi, K.B. Kahn / Industrial Marketing Management xxx (2015) xxxxxx

were provided by the same respondents. Reasonable procedural measures were taken to minimize this limitation and to ensure that survey respondents were competent to reect the company perspective regarding
benets and satisfaction, but future research might consider a different
data collection approach. Secondly, a broader cross-section of industries
would establish greater generalizability of research results however,
the present research did not indicate differences across the industries
included. Thirdly, the fact that all the B2B services studied were provided by Northern European rms raises the issue of generalizability to
other geographical locations. While not all customers of these rms
were Northern European, replication in other parts of the world is
warranted.
An additional research avenue is to use customer loyalty as a dependent variable, instead of customer satisfaction. This is because loyalty
may be quite relevant when considering more hedonic services for
which satisfying expectations or fullling needs may not be the most
important consideration (e.g. Arnould & Price, 1993). Indeed, Jones,
Reynolds, and Arnold (2006) argue that customer satisfaction is not
necessarily directly related with customer loyalty. Repeating the analysis conducted in the present paper with a measure of customer loyalty
as the dependent variable could be a valuable avenue for further
research.
Together these and other related future research efforts are encouraged to help clarify and provide additional understanding around the
benets concept in the B2B context. Honing a theory base on what
this concept represents and enacts is worthwhile because benets
represent a fundamental aspect of marketing theory and underlie B2B
company strategy for service delivery and service innovation.
Acknowledgement
Part of the funding for this work was provided from the European
Union Seventh Framework Programme for research, technological
development and demonstration under grant agreement no. 324448,
and by the Icelandic Research Fund, grant agreement no. 100668022.
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