Executives with Customer Experience and Firm Performance in the B2B Context

European Journal of Marketing. ePub ahead of print, https://doi.org/10.1108/EJM-06-2020-0449

47 Pages Posted: 22 Mar 2021 Last revised: 11 May 2021

See all articles by Cong Feng

Cong Feng

University of Mississippi - School of Business Administration

Jiong Sun

Purdue University - Department of Consumer Sciences and Retailing

Yiwei Fang

Illinois Institute of Technology

Iftekhar Hasan

Fordham University ; Bank of Finland; University of Sydney

Date Written: January 22, 2021

Abstract

Purpose
This paper aims to examine the presence of an executive with customer experience (ECE) in a supplier firm’s top management team (TMT). The role of ECE presence remains understudied in the marketing literature. This study attempts to examine the relationship between ECE presence and firm performance.

Design/methodology/approach
This paper draws on the resource-based view of the firm and adopts a panel firm fixed effects estimator to test the proposed hypotheses. The empirical analysis uses a sample of 1,974 firm-year observations with 489 unique supplier firms. Selection-induced endogeneity is mitigated through the Heckman procedure.

Findings
ECE presence improves firm performance. Additionally, firms benefit less from ECE presence if a board member with customer experience (BCE) is also present, if a chief executive officer commands a higher pay slice (compared to other executives), and if a TMT is more functionally diversified. However, ECE presence is particularly beneficial if the overall economy is in contraction. Comparing the functional positions held by ECEs reveals that ECE in the marketing function (as a chief marketing officer) offers the largest benefit to an average supplier firm. ECE presence is also associated with other firm outcomes (e.g. bankruptcy odds, innovation and customer orientation).

Research limitations/implications
This study makes four contributions to the literature. First, this research contributes to existing studies that investigate marketing expertise in the upper corporate pyramid. Second, the study contributes to the burgeoning body of work across business disciplines that attempt to understand the impact of CxOs on firm performance. Third, the study contributes to the vast literature on customer orientation indirectly. Finally, this paper contributes to the broader literature studying the influence of board and TMT characteristics.

Practical implications
The findings are of particular importance to business-to-business firms. This paper shows that suppliers can benefit significantly from managers with customer experience. Four contingency factors moderate the relationship between ECE presence and firm performance. Among the various functional positions held by an ECE, the findings suggest that hiring an ECE for the marketing functional area is the most beneficial. ECE stands out as a better option for a company than BCE to improve firm performance. ECE presence is also associated with bankruptcy odds, innovation and customer orientation.

Originality/value
This paper provides the first empirical evidence regarding how ECE affects firm performance and also extends prior research on the value of human capital in TMT.

Keywords: Executives with customer experience; Firm performance; Board members with customer experience; CEO pay slice; TMT functional diversity; Economic contraction

Suggested Citation

Feng, Cong and Sun, Jiong and Fang, Yiwei and Hasan, Iftekhar, Executives with Customer Experience and Firm Performance in the B2B Context (January 22, 2021). European Journal of Marketing. ePub ahead of print, https://doi.org/10.1108/EJM-06-2020-0449, Available at SSRN: https://ssrn.com/abstract=3771078

Cong Feng (Contact Author)

University of Mississippi - School of Business Administration ( email )

PO Box 3986
Oxford, MS 38677
United States

Jiong Sun

Purdue University - Department of Consumer Sciences and Retailing ( email )

West Lafayette, IN 47907
United States

Yiwei Fang

Illinois Institute of Technology ( email )

Stuart Graduate School of Business
565 W. Adams St.
Chicago, IL 60661
United States

Iftekhar Hasan

Fordham University ( email )

45 COLUMBUS AVENUE
GBA-5TH FLOOR
NEW YORK, NY 10023
United States

Bank of Finland ( email )

P.O. Box 160
Helsinki 00101
Finland

University of Sydney ( email )

P.O. Box H58
Sydney, NSW 2006
Australia

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