Antecedents of Client Loyalty in B2B IT Services – Leading Through Strategic Competence or Service Delivery?

Client Loyalty is an important strategic objective of managers, both in the Business-to-Consumer (B2C) and Business-to-Business (B2B) environment, including IT Services industry. It has significant impact on a firms’ revenue and is considered as an important source of competitive advantage. Consequently, researchers and practitioners have been paying increasing attention to the study of interrelationships between service quality, client satisfaction and perceived value as antecedents of client loyalty. In a highly competitive environment, strategic competence of the service provider and value co-creation plays a significant role in ensuring client loyalty. We empirically investigate real world data of IT clients spanning 17 geographies and 23 industries in a B2B context. Our results suggest that strategic competence of the provider; ability to serve as one stop IT provider investing into cutting-edge technology and providing innovative solutions to clients, more than consistent service delivery, plays a significant role in effecting client loyalty through its impact on their quality perception. We also report intriguing results on mediation effects between value, satisfaction and loyalty intentions (recommend, repurchase). The effect of value on likelihood to recommend is completely mediated by satisfaction, but only partially (and inconsistently) mediated by satisfaction towards repurchase signifying importance of value co-creation.