Antecedents and Consequences of Customer Confusion in Service-to-Business Markets

Abstract

Service-to-business (S2B) markets are growing consistently and have consequently received increased attention both in research and practice. However, as seen in the example of outsourcing solutions, blatant inefficiencies exist in purchase decision-making: 80% of business process outsourcing contracts have to be renegotiated within two years, and 20% of these contracts fail. How can the high failure-rate in the purchases of business-to-business (B2B) services be explained? We maintain that, due to (a) the perceived complexity of the services and (b) the perceived complexity of the market, managers can become confused and are therefore forced to rely on non-rational decision-making, which impacts their purchasing process. This study intends to show the impact of confusion on S2B purchasing processes and thus contribute to a holistic understanding of the purchasing process, in order to shed light on possible causes of above-mentioned inefficiencies.