Prof Robert Morgan Relationship Marketing

8/8/2019 Prof Robert Morgan Relationship Marketing

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Commitment & Trust vs. SatisfactionCommitment & Trust vs. Satisfaction

Satisfaction is very unstableSatisfaction is very unstableSatisfaction is a poor predictor of Satisfaction is a poor predictor of

outcomesoutcomesCommitment & Trust are very stableCommitment & Trust are very stableCommitment & Trust are good predictorsCommitment & Trust are good predictors

of outcomesof outcomes


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Outcomes of Commitment & Trust Outcomes of Commitment & Trust

RetentionRetentionPositive Word of Positive Word of MouthMouthCooperationCooperationEase of ComplainingEase of ComplainingWillingness toWillingness to

ComplainComplain

UncertaintyUncertaintyFunctional Conflict Functional Conflict Share of Wallet Share of Wallet New Product AdoptionNew Product Adoption


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How do we generateHow do we generate

Commitment & Trust?Commitment & Trust?Economic Content Economic Content Resource Content Resource Content

Social Content Social Content


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Understanding How CustomerUnderstanding How CustomerRelationships DevelopRelationships Develop

Relationship Attitudes

RelationshipsEconomicContent

RelationshipsSocial

Content

RelationshipsResourceContent

AttitudinalOutcomes

BehavioralOutcomes


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Building RelationshipsBuilding Relationships


RelationshipsEconomic

Content

RelationshipsSocial

Content


AttitudinalOutcomes

BehavioralOutcomes

First, let s look at thefundamental drivers of relationships, the

economic, resource, andsocial contents.


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Economic Content Economic Content

The purely economic costs and benefits of The purely economic costs and benefits of participating in the relationshipsparticipating in the relationships

Examples:Examples: Service feesService fees Interest ratesInterest rates Costs saved due to superior management of customer sCosts saved due to superior management of customer s

wealthwealth


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Resource Content Resource Content

Benefits gained that match/complement the needsBenefits gained that match/complement the needsor resources held by the partner.or resources held by the partner.

Examples:Examples: Professional competenceProfessional competence Comprehensive financial servicesComprehensive financial services

Business development assistanceBusiness development assistance Convenience (time as a resource)Convenience (time as a resource) TangiblesTangibles Brand equityBrand equity


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Social Content Social Content Psychic benefits gained due to feelings of Psychic benefits gained due to feelings of compatibilitycompatibility ---- similar values, goals, etc.similar values, goals, etc. -- -- that that result in a feeling of comfort.result in a feeling of comfort.

Examples:Examples: Relationships with employeesRelationships with employees Fit of firm s mission and actions with customers valuesFit of firm s mission and actions with customers values High quality communication programsHigh quality communication programs


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RelationshipsSocial

Content


AttitudinalOutcomes

BehavioralOutcomes

Next, let s look at theultimate outcomes of

relationships, which impact firm s business

performance.


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Attitudinal Outcomes Attitudinal OutcomesCustomer beliefs that result from relationshipCustomer beliefs that result from relationshipdynamics, these attitudes can go on to impact dynamics, these attitudes can go on to impact behaviors and the development of even strongerbehaviors and the development of even strongerattitudes.attitudes.

Examples:Examples: UncertaintyUncertainty Brand ambivalenceBrand ambivalence Brand equityBrand equity Brand personalityBrand personality


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Behavioral OutcomesBehavioral OutcomesPartner behaviors and intended behaviors that Partner behaviors and intended behaviors that directly or indirectly impact the firm sdirectly or indirectly impact the firm sperformance.performance.

Examples:Examples: RetentionRetention Positive word of mouthPositive word of mouth ComplainingComplaining Willingness to try new/other servicesWillingness to try new/other services


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RelationshipsSocial

Content


AttitudinalOutcomes

BehavioralOutcomes

What s missing? Intermediary,relationship attitudes. Theseattitudes are built from the

particular content of therelationship and go on to impact

critical outcomes!


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The Moneyball PhenomenonThe Moneyball Phenomenon


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The Moneyball PhenomenonThe Moneyball PhenomenonWhat factors make for asuccessful baseball player?

Traditional Wisdom:

- 60 yard dash time- RBIs- Batting average


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The Moneyball PhenomenonThe Moneyball PhenomenonWhat factors make for asuccessful baseball player?

Traditional Wisdom:

- 60 yard dash time- RBIs- Batting average

Sabermetrics indicates:- Slugging average

(total bases/at bats)- On-base percentage


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Moneyball andMoneyball and

Relationship MarketingRelationship MarketingExample: Retail BankingExample: Retail Banking Traditional wisdom: rates, fees, and callingTraditional wisdom: rates, fees, and calling

the customer by namethe customer by name Research indicates: responsiveness, reliability,Research indicates: responsiveness, reliability,

and brand equityand brand equity


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Multiple Constituencies ApproachMultiple Constituencies Approach

Premise: Individuals develop commitment Premise: Individuals develop commitment to an organization through theto an organization through thecommitments that develop first tocommitments that develop first toindividuals or groups of individuals.individuals or groups of individuals.Organizations do the same thing, as aOrganizations do the same thing, as acollection of individuals.collection of individuals.


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Multiple Constituency ApproachMultiple Constituency Approach

If we can understand who theseIf we can understand who these constituencies are, and how these constituencies are, and how theseconstituency commitments develop, andconstituency commitments develop, andtheir unique contribution, we can bettertheir unique contribution, we can bettermanage the overall relationship.manage the overall relationship.


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Top Manage men tCommitment

Acc ount Exec utiveCommitment

Creative Tea m

Commitment

Media TeamCommitment

Agenc y

Top Mana geme ntTrust

Account ExecutiveTrust

Creative Tea mTrust

Media TeamTrust

Agenc yTrust

Commitment

0.14

0.23

0.10

0.10

0.54

0.34

0.81

0.75

0.69 0.66

0.32

0.330.05

SMC = 0.65

SMC = 0.57

SMC = 0.47

SMC = 0.43

SMC = 0.75

SMC = 0.73

***

****

****

*

*

********

**** ****

****

***

***

**

*

***

****

p < 0.05

p < 0.005

p < 0.01

p < 0.001

FIGURE 2:Constituenc y Commitments as Moderators in a

Multiple Constituenc y Model of Commitment and Trust in Relationship Marketing


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Research OpportunitiesResearch Opportunities

How are high levels of trust achievedHow are high levels of trust achievedquickly?quickly?

How do economic, resource, and socialHow do economic, resource, and socialcontent vary in importance over thecontent vary in importance over therelationship life cycle?relationship life cycle?Implications for outsourcing?Implications for outsourcing?

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Prof Robert Morgan Relationship Marketing