Work published in the International Journal of Business Innovation and Research offers a theoretical perspective on whether an innovative form of marketing is a double-edged sword for business owners who operate in the business-to-business, B2B, sphere.
In conventional marketing, businesses hope to profit from essentially one-time transactions and sales. There was a nod to customer loyalty, but on the whole, this was largely ignored as long as one-time sales kept rolling in. In today’s world, there is an increasing push towards repeat transactions, brand awareness, and customer loyalty meaning ongoing sales and so profits. This so-called “relationship marketing” builds long-term relationships between one commercial concern and a business customer rather than focusing on those one-time transactions.
The obvious goal of relationship marketing is to establish a strong and lasting connection with customers through loyalty programs, personalized marketing campaigns, and customer service initiatives. The benefit to the company is almost guaranteed repeat business and an increase in word-of-mouth referrals to potential new customers thanks to the satisfaction of the loyal customer. The benefits to the loyal customer of the relationship are loyalty bonuses, better, more personal, service and communication regarding their purchases, as well as product offerings tailored to their needs and budget.
Deepika, Shashank Vikram Pratap Singh, and Mohinder Paul of the University of Delhi, India, suggest that this form of marketing for all its mutual benefits may have a dark side. It may be a win-win, but it could also be a double-edged sword. They offer a theoretical perspective on the downsides of this popular business strategy.
The researchers point out that relationship marketing can lead to negative outcomes between companies that adopt this strategy. Earlier research has perhaps ignored this aspect of the approach, but the team argues that it is an important area that deserves more attention. They suggest that there are two factors at play. The first is time – over time, a relationship can become routine and boring, losing the spark that made it special in the first place. The second factor is opportunism – when one partner has the chance to take advantage of the other, it can sour a positive relationship.
The researchers provide a framework for understanding the variables associated with relationship marketing. The positives of trust and commitment and the negatives of vulnerability, complacency, and suspicion. They argue that if a partner has the opportunity to engage in opportunism this can be detrimental to the relationship. Those positives soon become negatives and the relationship fails. The team suggests that, as with many other relationships, keeping the spark alive and avoiding complacency is key. They also suggest that while partners can, of course, be trusting of each other it is as well to be aware of the early signs of opportunism and cheating and to nip them in the bud for the sake of the relationship.
The team adds that future research might consider the other factors at play such as reduced vigilance, dependence, the quality of available alternatives, agent-specific knowledge, dissatisfaction, and lack of innovation. All of these factors can affect relationships between businesses buying and selling products and services from each other.
Deepika, Singh, S.V.P. and Paul, M. (2023) ‘Does relationship marketing have a dark side? A theoretical perspective’, Int. J. Business Innovation and Research, Vol. 30, No. 3, pp.389–406.
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