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 across migration paths can help firms promote customer migration to higher performance states and prevent deterioration to poorer ones. A counterfactual elasticity analysis compares the relative importance of different migration strategies at various relationship stages. This research thus moves beyond extant RM literature by focusing on the differential effectiveness of RM strategies across relationship states, and it provides managerial guidance regarding efficient, dynamic resource allocations.
AndersonErin and WeitzBarton (1992), “The Use of Pledges to Build and Sustain Commitment in Distribution Channels,”Journal of Marketing Research, 29 (February), 18–34.
2.
AndersonJames C. and NarusJames A. (1991), “Partnering as a Focused Market Strategy,”California Management Review, 33 (Spring), 95–113.
3.
AscarzaEva and HardieBruce G.S. (2013), “A Joint Model of Usage and Churn in Contractual Settings,”Marketing Science, 32 (July/August), 570–90.
4.
BrownJames R., DevChekitan S., and LeeDong-Jin (2000), “Managing Marketing Channel Opportunism: The Efficacy of Alternative Governance Mechanisms,”Journal of Marketing, 64 (April), 51–65.
5.
CampbellMargaret C. (1999), “Perceptions of Price Unfairness: Antecedents and Consequences,”Journal of Marketing Research, 36 (May), 187–99.
6.
CannonJoseph P., AchrolRavi S., and GundlachGregory P. (2000), “When Does Vertical Coordination Improve Industrial Purchasing Relationships?”Journal of Marketing, 64 (October), 52–65.
7.
CeluchKevin G., BanthamJohn H., and KasoufChickery J. (2006), “An Extension of the Marriage Metaphor in Buyer–Seller Relationships: An Exploration of Individual Level Process Dynamics,”Journal of Business Research, 59 (May), 573–81.
8.
DantRajiv P. and SchulPatrick L. (1992), “Conflict Resolution Processes in Contractual Channels of Distribution,”Journal of Marketing, 56 (January), 38–54.
9.
De WulfKristof, Odekerken-SchröderGaby, and IacobucciDawn (2001), “Investments in Consumer Relationships: A Cross-Country and Cross-Industry Exploration,”Journal of Marketing, 65 (October), 33–50.
10.
DwyerF. Robert and LaGaceRosemary R. (1986), “On the Nature and Role of Buyer–Seller Trust,” in AMA Summer Educators Conference Proceedings, Vol. 11. Chicago: American Marketing Association, 40–45.
11.
DwyerF. Robert, SchurrPaul H., and OhSejo (1987), “Developing Buyer–Seller Relationships,”Journal of Marketing, 51 (April), 11–27.
12.
EyubogluNermin and BujaAndreas (2007), “Quasi-Darwinian Selection in Marketing Relationships,”Journal of Marketing, 71 (October), 48–62.
13.
FangEric, PalmatierRobert W., ScheerLisa K., and LiNing (2008), “Trust at Different Organizational Levels,”Journal of Marketing, 72 (March), 80–98.
14.
FornellClaes and LarckerDavid F. (1981), “Evaluating Structural Equation Models with Unobservable Variables and Measurement Error,”Journal of Marketing Research, 18 (February), 39–50.
15.
FrazierGary L. (1983), “Inter-Organizational Exchange Behavior in Marketing Channels: A Broadened Perspective,”Journal of Marketing, 47 (Fall), 68–78.
16.
GanesanShankar (1993), “Negotiation Strategies and the Nature of Channel Relationships,”Journal of Marketing Research, 30 (May), 183–203.
17.
GarbarinoEllen and JohnsonMark S. (1999), “The Different Roles of Satisfaction, Trust, and Commitment in Customer Relationships,”Journal of Marketing, 63 (April), 70–87.
GouldnerAlvin W. (1960), “The Norm of Reciprocity: A Preliminary Statement,”American Sociological Review, 25 (2), 161–78.
20.
GrégoireYany and FisherRobert J. (2008), “Customer Betrayal and Retaliation: When Your Best Customers Become Your Worst Enemies,”Journal of the Academy of Marketing Science, 36 (Summer), 247–61.
21.
GundlachGregory T., AchrolRavi S., and MentzerJohn T. (1995), “The Structure of Commitment in Exchange,”Journal of Marketing, 59 (January), 78–92.
22.
HamiltonJames D. (1989), “A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle,”Econometrica, 57 (March), 357–84.
23.
HeideJan B. (1994), “Interorganizational Governance in Marketing Channels,”Journal of Marketing, 58 (January), 71–85.
24.
HeideJan B. and JohnGeorge (1990), “Alliances in Industrial Purchasing: The Determinants of Joint Action in Buyer–Supplier Relationships,”Journal of Marketing Research, 27 (February), 24–36.
25.
HeideJan B. and JohnGeorge (1992), “Do Norms Matter in Marketing Relationships?”Journal of Marketing, 56 (April), 32–44.
26.
HibbardJonathan D., KumarNirmalya, and SternLouis W. (2001), “Examining the Impact of Destructive Acts in Marketing Channel Relationships,”Journal of Marketing, 38 (February), 45–61.
27.
JapSandy D. and AndersonErin (2007), “Testing a Life-Cycle Theory of Cooperative Interorganizational Relationships: Movement Across Stages and Performance,”Management Science, 53 (February), 260–75.
28.
JapSandy D. and GanesanShankar (2000), “Control Mechanisms and the Relationship Life Cycle: Implications for Safeguarding Specific Investments and Developing Commitment,”Journal of Marketing Research, 37 (May), 227–45.
29.
JohnsonMichael D. and SelnesFred (2004), “Customer Portfolio Management: Toward a Dynamic Theory of Exchange Relationships,”Journal of Marketing, 68 (April), 1–17.
30.
JoshiAshwin W. (2009), “Continuous Supplier Performance Improvement: Effects of Collaborative Communication and Control,”Journal of Marketing, 73 (January), 133–50.
31.
KahnBarbara (1998), “Variety: From the Consumer's Perspective,”Product Variety Management, 10 (January), 19–37.
32.
KaufmannPatrick J. and SternLouis W. (1988), “Relational Exchange Norms, Perceptions of Unfairness, and Retained Hostility in Commercial Litigation,”Journal of Conflict Resolution, 32 (September), 534–52.
33.
KozaKaren L. and DantRajiv P. (2007), “Effects of Relationship Climate, Control Mechanism, and Communications on Conflict Resolution Behavior and Performance Outcomes,”Journal of Retailing, 83 (August), 279–96.
34.
KozlenkovaIrina V., SamahaStephen A., and PalmatierRobert W. (2013), “Resource-Based Theory in Marketing,”Journal of the Academy of Marketing Science, 6 (April), 1–21.
35.
KumarNirmalya, ScheerLisa K., and SteenkampJan-Benedict E.M. (1995), “The Effects of Perceived Interdependence on Dealer Attitudes,”Journal of Marketing Research, 32 (August), 348–56.
36.
LangfredClaus W. (2007), “The Downside of Self-Management: A Longitudinal Study of the Effects of Conflict on Trust, Autonomy, and Task Interdependence in Self-Managing Teams,”Academy of Management Journal, 50 (August), 885–900.
37.
LarzelereRobert E. and HustonTed (1980), “The Dyadic Trust Scale: Toward Understanding Interpersonal Trust in Close Relationships,”Journal of Marriage and the Family, 42 (August), 595–604.
38.
LiShibo, SunBaohong, and MontgomeryAlan L. (2011), “Cross-Selling the Right Product to the Right Customer at the Right Time,”Journal of Marketing Research, 48 (August), 683–700.
39.
LuoAnita and KumarV. (2013), “Recovering Hidden Buyer–Seller Relationship States to Measure the Return on Marketing Investment in Business-to-Business Markets,”Journal of Marketing Research, 50 (February), 143–60.
40.
MacDonaldIain L. and ZucchiniWalter (1997), Hidden Markov and Other Models for Discrete-Valued Time Series. New York: CRC Press.
41.
MohrJakki J., FisherRobert J., and NevinJohn R. (1996), “Collaborative Communication in Interfirm Relationships: Moderating Effects of Integration and Control,”Journal of Marketing, 60 (July), 103–15.
42.
MontoyaR., NetzerO., and JedidiK. (2010), “Dynamic Allocation of Pharmaceutical Detailing and Sampling for Long-Term Profitability,”Marketing Science, 29 (5), 909–24.
43.
MoormanChristine, ZaltmanGerald, and DeshpandéRohit (1992), “Relationships Between Providers and Users of Market Research: The Dynamics of Trust Within and Between Organizations,”Journal of Marketing Research, 29 (August), 314–29.
44.
MorganRobert M. and HuntShelby D. (1994), “The Commitment-Trust Theory of Relationship Marketing,”Journal of Marketing, 58 (July), 20–38.
45.
MullinsRyan R., AhearneMichael, LamSon K., HallZachary R., and BoichukJeffrey P. (2014), “Know Your Customer: How Salesperson Perceptions of Customer Relationship Quality Form and Impact Account Profitability,”Journal of Marketing, 78 (November), 38–58.
46.
NetzerOded, LattinJames M., and SrinivasanVikram (2008), “A Hidden Markov Model of Customer Relationship Dynamics,”Marketing Science, 27 (March/April), 185–204.
47.
PalmatierRobert W., DantRajiv P., and GrewalDhruv (2007), “A Comparative Longitudinal Analysis of Theoretical Perspectives of Interorganizational Relationship Performance,”Journal of Marketing, 71 (October), 172–94.
48.
PalmatierRobert W., DantRajiv P., GrewalDhruv, and EvansKenneth R. (2006), “Factors Influencing the Effectiveness of Relationship Marketing: A Meta-Analysis,”Journal of Marketing, 70 (October), 136–53.
49.
PalmatierRobert W., HoustonMark B., DantRajiv P., and GrewalDhruv (2013), “Relationship Velocity: Toward a Theory of Relationship Dynamics,”Journal of Marketing, 77 (January), 13–30.
50.
PalmatierRobert W., ScheerLisa K., EvansKenneth R., and ArnoldTodd J. (2008), “Achieving Relationship Marketing Effectiveness in Business-to-Business Exchanges,”Journal of the Academy of Marketing Science, 36 (Summer), 174–90.
51.
PingRobert A. (1999), “Unexplored Antecedents of Exiting in a Marketing Channel,”Journal of Retailing, 75 (Summer), 218–41.
52.
RahimM. Afzalur (2002), “Toward a Theory of Managing Organizational Conflict,”International Journal of Conflict Management, 13 (3), 206–35.
53.
RindfleischAric and HeideJan B. (1997), “Transaction Cost Analysis: Past, Present, and Future Applications,”Journal of Marketing, 61 (October), 30–54.
54.
RingPeter Smith and Van de VenAndrew H. (1994), “Developmental Processes of Cooperative Interorganizational Relationships,”Academy of Management Review, 19 (January), 90–118.
55.
RousseauDenise M., SitkinSim B., BurtRonald S., and CamererColin (1998), “Not So Different After All: A Cross-Discipline View of Trust,”Academy of Management Review, 23 (July), 393–404.
56.
RusbultCaryl E., ZembrodtIsabella M., and GunnLawanna K. (1982), “Exit, Voice, Loyalty, and Neglect: Responses to Dissatisfaction in Romantic Involvements,”Journal of Personality and Social Psychology, 43 (December), 1230–42.
57.
SamahaStephen A., BeckJoshua T., and PalmatierRobert W. (2014), “The Role of Culture in International Relationship Marketing,”Journal of Marketing, 78 (September), 78–98.
58.
SamahaStephen A., PalmatierRobert W., and DantRajiv P. (2011), “Poisoning Relationships: Perceived Unfairness in Channels of Distribution,”Journal of Marketing, 75 (May), 99–117.
59.
ScheerLisa K., MiaoC. Fred, and PalmatierRobert W. (2015), “Dependence and Interdependence in Marketing Relationships: Meta-Analytic Insights,”Journal of the Academy of Marketing Science, 43 (November), 694–712.
60.
SchweidelDavid A., BradlowEric T., and FaderPeter S. (2011), “Portfolio Dynamics for Customers of a Multiservice Provider,”Management Science, 57 (3), 471–86.
61.
WathneKenneth H. and HeideJan B. (2000), “Opportunism in Interfirm Relationships: Forms, Outcomes, and Solutions,”Journal of Marketing, 64 (October), 36–51.
62.
WilsonDavid T. (1995), “An Integrated Model of Buyer–Seller Relationships,”Journal of the Academy of Marketing Science, 23 (Fall), 335–45.
63.
ZhangJonathan Z., NetzerOded, and AnsariAsim (2014), “Dynamic Targeted Pricing in B2B Relationships,”Marketing Science, 33 (May/June), 317–37.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
