Andreas Eggert

Relationship value and relationship quality: Broadening the nomological network of business‐to‐business relationships

Purpose – Established models of buyer-seller relationships do not reflect managerial emphasis on supplier performance evaluation when modelling business relationships. Proposes that relationship value should be included as a key constituent in such models. Aims to explore the constructs links with key constituents of relationship quality, i.e. commitment, satisfaction, and trust. Design/methodology/approach – A two-stage research design was used. First, depth-interviews were conducted with ten senior-level purchasing managers in US manufacturing companies. Second, data were gathered in a nation-wide mail survey among 400 purchasing professionals. Findings – The findings suggest that relationship value is an antecedent to relationship quality and behavioural outcomes in the nomological network of relationship marketing. Value displays a stronger impact on satisfaction than on commitment and trust. Value also directly impacts a customers intention to expand business with a supplier. In turn, its impact on the propensity to leave a relationship is mediated by relationship quality. Contrary to previous research, trust does not appear in this study as an antecedent of behavioural outcomes, but as a mediator of the satisfaction-commitment link. Research limitations/implications – Confirms the role of value as a key relationship building-block. Researchers should integrate this cognitive performance-based construct in models of business relationships. Limitations and research directions refer to the sampling procedure, the need to include the suppliers value perceptions, the possibility of conducting longitudinal research, and the opportunity to assess additional moderating variables. Practical implications – When the goal is to increase business with an existing customer, managers should focus on relationship value. In turn, when managers are concerned with the risk of customers leaving a relationship, they should focus on relationship quality. Trust appears as an important ingredient in stabilising existing business relationships. Originality/value – Stresses the pivotal role of relationship value in marketing. Contributes to a better fit between relationship marketing models and managerial practice in business markets.

Modeling the Impact of Corporate Reputation on Customer Satisfaction and Loyalty Using Partial Least Squares

Reputation is one of the most important intangible assets of a firm. For the most part, recent articles have investigated its impact on firm profitability whereas its effects on individual customers have been neglected. Using data from consumers of an international consumer goods producer, this paper (1) focuses on measuring and discussing the relationships between corporate reputation, consumer satisfaction, and consumer loyalty and (2) examines possible moderating and mediating effects among the constructs. We find that reputation is an antecedent of satisfaction and loyalty that has hitherto been neglected by management. Furthermore, we find that more than half of the effect of reputation onto loyalty is mediated by satisfaction. This means that reputation can only partially be considered a substitute for a consumer’s own experiences with a firm. In order to achieve consumer loyalty, organizations need to create both, a good reputation and high satisfaction.

Revenue and Profit Implications of Industrial Service Strategies

In many business markets, manufacturers seek service-led growth to secure their existing positions and continue to grow in increasingly competitive environments. Using longitudinal data from 513 German mechanical engineering companies and latent growth curve modeling, this study offers a fine-grained view of the financial performance implications of industrial service strategies. By disentangling the revenue and profit implications of industrial service strategies, findings reveal that such strategies increase both the level and the growth of manufacturing firms’ revenue streams. In contrast, they reduce the level but improve the growth of manufacturers’ profits. Results further suggest that services supporting the clients’ actions (SSC) and services supporting the supplier’s product (SSP) affect performance outcomes in different ways. SSCs directly affect revenue and profit streams. In turn, SSPs display only indirect effects on financial performance mediated through SSCs. A moderator analysis identifies two organizational contingencies that facilitate service business success: Only companies with decentralized decision-making processes and a high share of loyal customers can expect favorable financial results from industrial service strategies. In summary, this research provides significant insights and managerial guidance for turning service strategies into financial successes.

Exploring the impact of relationship transparency on business relationships: A cross-sectional study among purchasing managers in Germany

Abstract This paper introduces the notion of relationship transparency. It delineates this new concept from the interaction model of business relationships. We define relationship transparency as an individuals subjective perception of being informed about the relevant actions and properties of the other party in the interaction. Empirical data gathered in a cross-sectional survey among purchasing managers in Germany provide evidence that relationship transparency contributes to the overall success of a business relationship. According to our conceptual model and structural equation estimates, transparency delivers value to the customer, increases customer satisfaction and ultimately leads to favorable behavioral intentions.

Growing Existing Customers' Revenue Streams Through Customer Referral Programs

Customer referral programs are an effective means of customer acquisition. By assessing a large-scale customer data set from a global cellular telecommunications provider, the authors show that participation in a referral program also increases existing customers’ loyalty. In a field experiment, recommenders’ defection rates fell from 19% to 7% within a year, and their average monthly revenue grew by 11.4% compared with a matched control group. A negative interaction between referral program participation and customer tenure reveals that the loyalty effect of voicing a recommendation is particularly pronounced for newer customer–firm relationships. A laboratory experiment further demonstrates that referral programs with larger rewards strengthen attitudinal and behavioral loyalty, whereas smaller rewards affect only the behavioral dimension. This article contributes to our theoretical understanding of the roles played by the commitment–consistency principle and positive reinforcement theory as mechanisms underlying the effectiveness of customer referral programs.

Walk Your Talk: An Experimental Investigation of the Relationship Between Word of Mouth and Communicators’ Loyalty

Research provides ample evidence regarding the impact of word-of-mouth (WOM) communication on recipients. Service providers increasingly attempt to harness this power of WOM by introducing referral reward programs and other marketing instruments that aim to stimulate positive WOM. However, scholars have neglected to research the possibility that providing WOM also has consequences for the sender. Building on self-perception theory, this article argues that recommending a service provider improves the current customers’ loyalty to the provider and that positive WOM is not only effective for gaining but also for keeping customers. By conducting experiments in two different service settings, it is demonstrated that providing a recommendation influences the senders’ attitudinal and behavioral loyalty. The effect is found to be stronger for customers with low expertise in the service category and little experience with the provider. This means that encouraging customers in the early stages of their customer life cycle to give recommendations is specifically effective in increasing loyalty to the provider. Managers should consider using positive WOM as a loyalty-enhancing instrument and take the additional value from increased loyalty of their customer base into account for return-on-marketing calculations regarding WOM marketing campaigns, as well as customer equity calculations.

Key Account Managers' Role Within the Value Creation Process of Collaborative Relationships

ABSTRACT Value creation and key account management both attract increasing attention among marketing researchers and practitioners. At the intersection of both research streams, however, little is known about the role that key account managers play for the creation of customer-perceived value. Do key account managers contribute to customer value and if so, what are the basic drivers? Based on a qualitative study among key account managers and a quantitative study among purchasing managers, this paper develops and tests a framework for value creation in key account settings. From a managerial point of view, the paper informs key account managers of activities that effectively improve the overall value proposition. From a theoretical perspective, the study deepens our understanding of value creation in collaborative relationships.

Die zwei Perspektiven des Kundenwerts: Darstellung und Versuch einer Integration

Der Begriff des Kundenwerts gewinnt in der Marketingliteratur zunehmend an Beachtung. Manche Autoren nehmen in ihren Forschungen die Perspektive des Anbieters ein und untersuchen den Wert, den ein Kunde fur den Anbieter besitzt. Andere Autoren erforschen, wie der Kunde ein Wertangebot des Anbieters wahrnimmt. Weil sich beide Forschungsperspektiven desselben Kundenwertbegriffs bedienen, besteht die latente Gefahr von Verwechslungen. In dem vorliegenden Beitrag werden zunachst die zwei Perspektiven des Kundenwerts dargestellt und voneinander abgegrenzt. Anschliesend wird ein integratives Modell entwickelt, das beide Perspektiven des Kundenwerts zusammenfuhrt und die identifizierten Wirkzusammenhange in ihrer Starke und ihrem Vorzeichen spezifiziert. Damit soll ein Beitrag zur begrifflichen und konzeptionellen Klarheit im Bereich der Kundenwertforschung geleistet werden.

Managing the Bright and Dark Sides of Status Endowment in Hierarchical Loyalty Programs

In service industries, hierarchical loyalty programs are common relationship marketing instruments that award elevated status to customers who exceed a certain spending level (e.g., gold membership). In practice, service companies offer elevated status to some customers who do not meet the required spending level, in an attempt to profit from the profound allure of status. Relying on social psychology research and a mixed-method approach, this study analyzes the loyalty impact of status endowments, defined as awards of elevated status to customers who are not entitled to it. An exploratory qualitative study identifies customer gratitude and customer skepticism as positive and negative mediators, respectively, of customers’ attitudinal responses to endowed status. Quantitative studies—two experimental and one survey—substantiate these bright and dark sides of endowed status. The efficacy of status endowment is contingent on the context. To alleviate the dark-side effect, managers can allow target customers to actively choose whether to be endowed, especially those who are close to achieving the status already, and provide valuable preferential treatment to customers elevated by either endowment or achievement. These insights offer guidelines for whether and how to use status endowment in hierarchical loyalty programs.

Exploring the Impact of Sales Technology on Salesperson Performance: A Task-Base d Approach

Drawing on a qualitative study in the pharmaceutical industry, this research suggests that sales technology can support both externally focused tasks toward managing customer relationships and internal administrative tasks. Partial least squares path modeling reveals that sales technology has a direct effect on salesperson performance when used as a customer relationship tool and a perfectly mediated effect when used for internal coordination. While the customer relationship dimension is driven by factors that trigger voluntary usage, the internal coordination dimension is explained by factors imposed from outside. Consequently, sales technology should be designed to enable customer relationships rather than being perceived as a cost-cutting tool. In addition, sales managers should not impose technology usage. Rather, they should support self-initiating factors that stimulate technology usage for improving customer relationships.