Managing customer perceptions of the business environment for competitive advantage

How customer perceptions of the business environment influence customer behaviours is an under-researched area. We conceptualise customer behaviour as a response to perceptions of the business environment and categorise these as either functional or dysfunctional depending upon the potential impact on the organisation. Bendapudi and Berry (1997) propose a framework that links specific customer behaviours to either the presence of trust or perceived dependence. However, we argue that some business environments may be more likely to result in functional or dysfunctional customer behaviours as a result of greater perceived dependency, irrespective of whether customers trust their service providers, or business partners. The findings of a qualitative study of legal service clients are used to propose the need to contextualise the Bendapudi and Berry framework to enhance its applicability to practice. We posit practical steps for managing customer perceptions to reduce the negative impact of customer behaviours associated with dependence on provider organisations.