Exchange events are fundamental building blocks of business relationships and essential to relationship development. However, some events contribute to incremental relationship development, as predicted by life cycle theories, whereas others spark “turning points” with dramatic impacts on the relationship. Such transformational relationship events are encounters between exchange partners that significantly disconfirm relational expectations (positively or negatively); they result in dramatic, discontinuous change to the relationship's trajectory and often reformulate the relationship itself. With a three-study, multimethod design, the authors (1) establish a foundation for differentiating dramatic and incremental exchange events on the basis of relational versus product expectations and disconfirmations, thus revealing that strong relationships benefit product disconfirmations but harm relational disconfirmations, and (2) conceptualize, define, and differentiate transformational relationship events from other types of disconfirming events and then link them to exchange performance.
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