Marketing Principle #3 All Competitors React  Managing Relationship-based Sustainable Competitive Advantage Agenda

Unfairness Aggravates the Negative Effect of Other Damaging Activities
Relationship Damaging Factors
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Relationship Capabilities
(Samaha, Palmatier, and Dant 2011)
[493 customers over three years]
Conflict
Perceived Unfairness
Opportunism
Interfirm cooperation
Interfirm flexibility
Interfirm performance
Strategies to Suppress Conflict and Opportunism can Worsen Unfairness
Relationship Damaging Factors
_
+
+
+
+
_
_
_
_
Relationship Capabilities
(Samaha, Palmatier, and Dant)
[493 customers over three years]
Conflict
Perceived Unfairness
Opportunism
Interfirm cooperation
Interfirm flexibility
Interfirm performance
Contract utilization
High Conflict and Opportunism Have Minimal Effect in Absence of Unfairness
(Samaha, Palmatier, and Dant 2011)

However, Firms Often Expose Themselves to the Toxic Effects of Unfairness

• Lost customer analysis shows that customers often leave due to the emotional push from unfairness (overcome exit barriers)
• Loyalty, reward, and relationship programs are often the culprit
• Program participation tops 1.8 billion; average US household subscribes to 14 different programs
• But, often fail to meet financial expectations
• Benefits to target customers can be overcome/offset by damage to bystanders
• Up in the Air Link
• Some programs are only available to new customers

(Henderson, Beck, and Palmatier 2011; Steinhoff and Palmatier 2014)
RM Can Simultaneous Help and Hurt Firm’s “Overall” Performance: 3 Key Elements