Showing papers on "Relationship marketing published in 2016"

Creating Enduring Customer Value

Abstract: One of the most important tasks in marketing is to create and communicate value to customers to drive their satisfaction, loyalty, and profitability. In this study, the authors assume that customer value is a dual concept. First, in order to be successful, firms (and the marketing function) have to create perceived value for customers. Toward that end, marketers have to measure customer perceived value and have to provide customer perceptions of value through marketing-mix elements. Second, customers in return give value through multiple forms of engagement (customer lifetime value, in the widest sense) for the organization. Therefore, marketers need to measure and manage this value of the customer(s) to the firm and have to incorporate this aspect into real-time marketing decisions. The authors integrate and synthesize existing findings, show the best practices of implementation, and highlight future research avenues.

Dynamic Relationship Marketing

Abstract: Firms routinely engage in relationship marketing (RM) efforts to improve their relationships with business partners, and extant research has documented the effectiveness of various RM strategies. According to the perspective proposed in this article, as customers migrate through different relationship states over time, not all RM strategies are equally effective, so it is possible to identify the most effective RM strategies given customers’ states. The authors apply a multivariate hidden Markov model to a six-year longitudinal data set of 552 business-to-business relationships maintained by a Fortune 500 firm. The analysis identifies four latent buyer–seller relationship states, according to each customer’s level of commitment, trust, dependence, and relational norms, and it parsimoniously captures customers’ migration across relationship states through three positive (exploration, endowment, recovery) and two negative (neglect, betrayal) migration mechanisms. The most effective RM strategies acr...

Does relationship marketing matter in online retailing? A meta-analytic approach

Abstract: Building on the meta-analytic model suggested by Palmatier et al. Journal of Marketing, 70, 136–153, (2006), this study extends the relationship marketing framework to the domain of online retailing to identify what strategies help build relationships with online customers. Specifically, this meta-analytic study identifies key antecedents and consequences of relationship marketing in online retailing. The study also examines the relationship between the four mediators—trust, commitment, relationship quality, and relationship satisfaction— and the antecedents and consequences of relationship marketing. Similarity and seller expertise were found to have the strongest impact on relational mediators, and word of mouth was the most critical outcome of relationship marketing efforts. The model proffered in this study will motivate hypotheses to be examined by future researchers. The model also helps managers to identify the key drivers of relationship marketing in online retailing.

Understanding loyalty program effectiveness: managing target and bystander effects

Abstract: Loyalty programs are a ubiquitous marketing tactic, yet many of them perform poorly and the reasons for loyalty program failure remain unclear to both marketing managers and researchers. This article presents three studies—two experiments and one survey—in support of the notion that a greater understanding of loyalty program performance demands an expanded theoretical framework. Specifically, researchers and managers must account for loyalty programs’ effects on both target and bystander customers in the firm’s portfolio, the simultaneous effects of three performance-relevant mediating mechanisms (gratitude, status, unfairness), and the contingent effects of program delivery (rule clarity, reward exclusivity, reward visibility) on specific mediating linkages. The results provide insights into why and when loyalty programs fail and into the complex trade-offs managers face. Loyalty programs have opposing effects on target and bystander customers’ loyalty and sales. While rule clarity suppresses both negative bystander as well as positive target effects, reward visibility enhances both types of effects. Exclusive rewards offer a means to alleviate negative bystander effects without affecting targets. The article both conceptually and empirically establishes a comprehensive analysis framework that can help marketing managers and researchers evaluate and improve loyalty program effectiveness.

Demonstrating the Value of Marketing

Abstract: Marketing departments are under increased pressure to demonstrate their economic value to the firm. This challenge is exacerbated by the fact that marketing uses attitudinal (e.g., brand awareness), behavioral (e.g., brand loyalty), and financial (e.g., sales revenue) performance metrics, which do not correlate highly with each other. Thus, one metric could view marketing initiatives as successful, whereas another could interpret them as a waste of resources. The resulting ambiguity has several consequences for marketing practice. Among these are that the scope and objectives of marketing differ widely across organizations. There is confusion about the difference between marketing effectiveness and efficiency. Hard and soft metrics and offline and online metrics are typically not integrated. The two dominant tools for marketing impact assessment, response models and experiments, are rarely combined. Risk in marketing planning and execution receives little consideration, and analytic insights are n...

Enhancing customer relationships with retail service brands: The role of customer engagement

Abstract: Purpose – The concept of customer engagement (CE) has emerged as an important indicator of customer-brand relationship strength. However, limited research exists to provide insight into how CE enhances the effectiveness of building such a relationship in retail services. The purpose of this paper is to extend the current understanding of CE through examination of its role in the development of customer-brand relationship quality. Design/methodology/approach – To test the hypotheses contained in the proposed conceptual model, the authors used a quantitative method that included a survey questionnaire to measure customers’ perceptions with respect to the constructs of interest. Specifically, two studies were conducted in Australia. Study 1 was intended to empirically test the theoretical relationships among the constructs, while Study 2 aimed to replicate the proposed model with a different sample to enhance external validity. Findings – In two separate studies, the results of a structural model show that t...

The transpiring journey of customer engagement research in marketing: A systematic review of the past decade

Abstract: Purpose To understand how customer engagement has been researched in the last decade, the purpose of this paper is to provide a systematic review of customer engagement research in the existing literature, derive a comprehensive definition of customer engagement and summarize few important and basic issues that future research should address. Design/methodology/approach An extensive literature review was carried out on customer engagement spread over 38 journals identified from online academic databases of Scopus, Emerald, EBSCOS and Science Direct. A total of 66 conceptual and empirical articles on customer engagement research spanning from 2005 to 2015 were analyzed based on different classification schemes. Findings Customer engagement is becoming a key concept in marketing. Customer engagement is a multi-dimensional concept comprising of cognitive, emotional, behavioral and social dimensions. The theoretical foundations of this concept predominantly lie with relationship marketing and service-dominant logic. Research on customer engagement has gained a significant pace in the last six years (2010-2015) but most of the articles on customer engagement have come from developed countries. Research limitations/implications By providing the distribution schema of customer engagement articles based on different criteria and by highlighting the future research avenues, this study is believed to serve as a valuable tool for researchers to understand the current scenario of customer engagement research in the marketing discipline and take this research area forward. This study acknowledges limitations with respect to its exclusive search criteria, which might affect its generalizability. Practical implications This study exhibits the favorable outcomes organizations can derive by building and managing an engaged customer base. The more an organization knows about how to engage its customers, the better adept it will be to enact so. Therefore, understanding customer engagement is imperative in that regard; this review will help organizations comprehend that better. Originality/value This is the first systematic review of customer engagement that provides a detailed understanding of the current state of customer engagement research on a single platform and also draws a comprehensive customer engagement conceptualization.

Students as customers in higher education: reframing the debate

Abstract: Even though marketing in higher education (HE) is well established, there is a continued debate about who the customer is, with many still not accepting that students should be viewed as customers in HE. The student as customer model has its opponents and proponents. This paper reframes the debate using the framework of market orientation, customer orientation, and service (including co-creation) and relationship marketing. Using newer conceptualizations of the role of customers, the paper recommends exploring how to respond to students as customers instead of continuing to deny that students are customers.

Marketing’s Impact on Firm Value: Generalizations from a Meta-Analysis

Abstract: The interest in the value relevance of marketing investments has given rise to numerous studies on the marketing–finance interface. This study integrates extant research findings and establishes empirical generalizations on marketing’s impact on firm value. Specifically, the authors conduct a meta-analysis of prior econometric elasticity estimates of the stock market impact of marketing actions and marketing assets. Analyses based on 488 elasticities drawn from 83 studies reveal a mean elasticity of .04 for advertising expenditure variables and of .54 for marketing asset variables. Among marketing assets, customer-related assets show a higher mean elasticity of .72, compared with .33 for brand-related assets. Further analyses show that advertising elasticities are lower in more concentrated industries and that marketing asset elasticities are higher during recession times. Researchers should also be aware that characteristics of the research design (e.g., the type of firm value metric used, the om...

Why are Customers Loyal in Sharing-Economy Services? A Relational Benefits Perspective

Abstract: Purpose – This study seeks to:(1) introduce a systematic taxonomy of relational benefits that drive consumers to select a service provider and then to maintain the relationship with them in sharing-economy businesses; (2) assess the relative strengths of these relational benefits in influencing consumers’ behavioral intentions on sharing-economy services; and (3) examine how commitment mediates the influence of relational benefits on customer loyalty in this context.Design/methodology/approach – This study first conducted a focus group discussion and then collected data from online surveys completed by 440 respondents in China. The study employed structural equation modeling to test the hypotheses.Findings – The findings of the study show that confidence and social benefits, as previous studies indicate, have significant and positive effects on commitment in sharing-economy services. Moreover, safety benefits, a new type of relational benefits discovered in sharing-economy services, also have significant effects on commitment. Furthermore, this study finds that commitment acts as the mediating mechanism, through which confidence, social, and safety benefits operate with respect to their effects on customer loyalty. Interestingly, special treatment benefits were found to have insignificant effects on commitment and loyalty in this context.Practical implications – This paper provides sharing-economy managers with insight on how to better create and sustain loyal relationships through the provision of relational benefits.Originality/value – First, this study provides a framework for incorporating relationship marketing and sharing-economy services. Second, this study takes the initial step to offer a clear view of why customers would like to be involved in the peer-to-peer relationship in the sharing economy and to explain how to strengthen the relationships between customers and the peer service providers.

Relationship value : drivers and outcomes in international marketing channels.

Abstract: Although collaborative business arrangements based on relationship marketing have become ubiquitous over the past decades, research studies of relationship value in international marketing channels are scarce. Drawing on the relational view of competitive advantage, this study investigates the drivers of relationship value in exporter–importer relationships and its impact on customer loyalty. The study findings reveal that relationship-specific investments, knowledge sharing, complementary capabilities, and relational norms are powerful contributors of importer-perceived value in an overseas supplier relationship. Importantly, exporter cultural sensitivity weakens the negative effect of psychic distance on relationship value; when cultural sensitivity is low, psychic distance takes on greater importance in attenuating relationship value, whereas when cultural sensitivity is high, psychic distance has no discernible effect. In addition, the results demonstrate that relationship value results in insensitivity to competitive offerings and future purchase expansion. The article concludes with a discussion of implications for international marketing theory and practice.

Engaging customers during a website visit: a model of website customer engagement

Abstract: Purpose A customer’s visit to a retail website is a critical “moment of truth” during which contemporary retailers attempt to simultaneously, during a single web navigation, capture customers’ attention, build rapport, and prompt them to act. By showing how to capture customer commitment over the course of a single website visit, the concept of customer website engagement, defined as “the process of developing cognitive, affective and behavioural commitment to an active relationship with the website”, addresses strategic concerns. Drawing from literature on engagement, the purpose of this paper is to consider how retail websites can engage customers during the course of a website navigation. A conceptual model of website customer engagement underpinned by relationship marketing and communication knowledge, shows how perceptions of the website’s exploration and sense-making potential can activate consumer engagement, and is then empirically tested. Design/methodology/approach Using survey data, measures of the four dimensions of engagement (interaction engagement, activity engagement, behavioural engagement, and communication engagement) and of three drivers are developed and validated. The model is tested empirically (n=301) using structural equation modelling. Findings The results support the process conceptualisation of engagement, which identifies organismic as well as conative stages, and show the distinct roles played by perceptions of informational exploration, experiential exploration and sense-making in activating engagement. Practical implications The study provides online retailing practice with an organising framework enabling online retailing managers to consider how, depending on their product category and their size, they might (re)design their website to optimally produce customer engagement. Originality/value The study contributes to online marketing and retailing knowledge by showing the relevance of the concept of engagement as it pertains to customers’ single navigations on retail websites, and by empirically showing, through a parsimonious model, how engagement can be activated and unfold.

The performance advantages for SMEs of product innovation and marketing resource-capability complementarity in emerging economies

Abstract: This study argues that small and medium-sized enterprises (SMEs) must possess both resources and capabilities at a superior level, and those resources and capabilities must be complementary with one another to achieve superior financial performance. The resources and capabilities of interest are product innovation and marketing. Using data from manufacturing SMEs, the results suggest that product innovation resource–capability complementarity, marketing resource–capability complementarity, and their interaction are positively related to financial performance through product innovation and customer performance. The findings suggest that some SMEs may outperform others not only because they possess a specific individual resource–capability complementarity but also because they create synergy and asset interconnectedness.

Using big data to model time-varying effects for marketing resource (re)allocation

Abstract: Marketing resource allocation has been a topic of intense scrutiny, yet the literature on the topic has not paid adequate attention to the fact that the effectiveness of marketing-mix elements varies over time. Despite the fact that firms collect volumes of data on their customers, existing estimation approaches do not readily lend themselves to modeling the temporal variations for big data and provide little guidance to managers in terms of their resource allocation decisions. We address this gap and argue that marketing-mix effectiveness varies with the evolution of the consumer-brand relationship and explicitly model these temporal variations using a time-varying effects model (TVEM) that accounts for self-selection of customers into receiving marketing communications and endogeneity of the number of such communications. The proposed TVEM framework handles the complexities associated with big data analytics and provides novel insights for data-driven decision making. We combine transaction data from a Fortune 500 retailer with demographic information obtained from Acxiom Corp for over a quarter million customers to test our framework. The results provide strong support for our proposed framework. Specifically, we find that the influence of marketing mailers, other transaction characteristics (coupon redemption, returns, and cross-buy), and demographic factors (age, income, household size, and interests) on sales varies significantly over the customer life cycle and ignoring such temporal variations can lead to gross misallocation of marketing investments. Specifically, our results suggest that firms can increase their revenues by over 17 percent by just reallocating their resources based on the proposed framework. To facilitate adoption of our proposed framework, we provide guidance and actionable insights for managerial relevance.

Corporate image and reputation as drivers of customer loyalty

Abstract: Prior research suggests that corporate image and reputation can contribute to relationship marketing and customer loyalty. However, little empirical evidence supports the influence of these constructs on customer loyalty. This study investigates the influence of corporate image – comprised of functional and emotional aspects – and reputation on customer loyalty. A structural equation model is developed to test the research hypotheses. The study was tested using data collected from a sample of Spanish consumers in a service setting. Results show that functional and emotional image have a positive influence on corporate reputation. Similarly, corporate reputation has a positive influence on customer loyalty. This study may help managers use their resources more effectively by focusing on corporate image and reputation as important strategic assets to enhance customer loyalty.

Basic Marketing A Global Managerial Approach

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Online relationship marketing and affective customer commitment – The mediating role of trust

Abstract: The pervasive use of information technology has implications for consumer relationship management among financial services organisations. There is a need for increased understanding of how digital channels might influence the development and maintenance of firm–customer relationships and in particular the role of the Internet upon commitment and trust outcomes. Thus, this research aims to determine the relationship between online relationship marketing practices and affective customer commitment, and how this relationship is mediated by online channel trust. Data were collected from 200 online retail bank customers and Structural Equation Modelling was used to test the impact of five key online relationship marketing practices on affective commitment, and how trust mediates these relationships. We found that advocacy and collaboration have a direct relationship with affective commitment, while trust mediates the influence of engagement and personalisation on affective commitment. The article highlights the significance of trust in technology when using online channels to build customer relationships.

Why did they do it? How customers’ self-service technology introduction attributions affect the customer-provider relationship

Abstract: Purpose – Customers often think that innovations, such as self-service technologies (SSTs), are introduced by service providers to cut costs rather than extend customer service levels. The purpose of this paper is to investigate how customers use such attributions to adjust their perceptions of relational value. Design/methodology/approach – Drawing on attribution and relationship marketing theories, this study proposes a conceptual model that includes benefit and cost attributions, their antecedents, and consequences. Survey data came from customers of a supermarket that recently introduced self-scanning technology. Findings – Attributions mediate the impact of SST performance on relational value. This value is highest for customers with high-benefit and low-cost attributions; customers with low-benefit and low-cost attributions exhibit detrimental effects on the exchange relationship with the firm. Characterized by low self-efficacy, low education, and low spending, these latter customers appear ambival...

Service quality as a predictor of customer satisfaction and customer loyalty

Abstract: Background: Service quality, customer satisfaction and custome r loyalty have received a special attention in the recent health sector literature. T he aim of this study was to examine the correlation between service quality and customer satisfaction as well as the co rrelation between service quality and customer loya lty. Methods: The self-report questionnaires gathered from patie nts at army medical centres in West Malaysia were u sed for this purpose. Results: The outcomes of SmartPLS path model analysis showe d that service quality dimensions, namely tangible, reliability, responsiveness, assurance and empathy were significantly correlated with customer satisfa ction and customer loyalty. Conclusions: This finding confirms that the capability of servic e providers to appropriately implement the quality dimensions in providing medical services has enhanc ed customer satisfaction and customer loyalty in th e organizational

When Frontline Employee Behavior Backfires Distinguishing Between Customer Gratitude and Indebtedness and Their Impact on Relational Behaviors

Abstract: Frontline employee behaviors can elicit gratitude, allowing service providers to reap benefits including positive word of mouth. However, research has begun to suggest some behaviors might instead elicit indebtedness, a different emotion not always associated with positive outcomes. Using a qualitative study, we construct a model grounded in the threat to self-esteem theory that delineates differences in employee behaviors that generate these two emotions and the consequences of their elicitation. The model is empirically tested in two studies. Consistent with the threat to self-esteem theory, the findings indicate that customer gratitude arises in supportive employee-customer encounters and drives positive relational behaviors. Conversely, customer indebtedness occurs in threatening employee-customer encounters and possesses the potential to deter positive relational behaviors. As a result, we encourage scholars to appreciate the differences between these two emotions and managers to promote employee beh...

Valuing Subscription-Based Businesses Using Publicly Disclosed Customer Data

Abstract: The growth of subscription-based commerce has seen a change in the types of data firms report to external shareholders. More than ever before, companies are discussing and disclosing data on the number of customers acquired and lost, customer lifetime value, and more. This has fueled an increasing interest in linking the value of a firm's customers to the overall value of the firm, with the term customer-based corporate valuation being using to describe such efforts. While a number of researchers in the fields of marketing and accounting have explored this idea, their underlying models of customer acquisition and retention do not adequately reflect the empirical realities associated with these behaviors, and the associated valuation models do not live up to the standards of finance professionals. We develop a framework for valuing subscription-based firms that addresses both issues, and apply it to data from Dish Network and Sirius XM Holdings.

Dawn of the digital age and the evolution of the marketing mix

Abstract: This paper traces the journey of the marketing mix paradigm from its inception through continuous debate and discussion over the years. It traces the evolution of marketing mix components and the transformation of the marketing paradigm as society, technology, media, information and money have changed. A significant evolution of technology has changed the face of marketing. The paper uses inputs from marketing experts to trace the all-encompassing and unstoppable expansion of cyberspace that is changing every single dimension of consumers’ lifestyles. The paper outlines the acceleration of the information revolution with the advent of the ‘Read-Write Web’ or ‘Web 2.0’. Within this emergent virtual domain, corporate blogs, online communities, social networks and wikis have redefined the routine lives of individuals and changed the way people relate to information, brands, other people and even themselves. The discussion further proceeds to address three important issues facing the world of marketing today: the implications of today’s technologically inspired environment for marketing in the twenty-first century, the conceptualization of a customer mix as a pre-requisite for the marketing mix and, in conclusion, finally proposes an update to the marketing mix itself. In addition to this, the paper also traces the incorporation of the concepts of relationship marketing, customer relationship management, co-creation, salesforce automation and digital marketing in current-day marketing environments.