Relationship Marketing

Relationship Marketing Gaining Competitive Advantage Through Customer Satisfaction and Customer Retention Springer-Verlag Berlin Heidelberg GmbH Thorsten Hennig-Thurau . Ursula Hansen Editors Relationship Marketing Gaining Competitive Advantage Through Customer Satisfaction and Customer Retention With 80 Figures and 24 Tables Springer Dr. Thorsten Hennig-Thurau Prof. Dr. Ursula Hansen University of Hannover Department of Marketing Koenigsworther Platz 1 30167 Hannover Germany ISBN 978-3-642-08622-9 ISBN 978-3-662-09745-8 (eBook) DOI 10.1007/978-3-662-09745-8 Library of Congress Cataloging-in-Publication Data Die Deutsche Bibliothek - CIP-Einheitsaufnahme Relationship marketing: gaining competitive advantage through customer satisfaction and customer retention; with 24 tables 1 Thorsten Hennig-Thurau; Ursula Hansen, ed. - Berlin; Heidelberg; New York; Barcelona; Hong Kong; London; Milan; Paris; Singapore; Tokyo: Springer, 2000 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illus trations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer-Verlag. Viola tions are liable for prosecution under the German Copyright Law. © Springer-Verlag Berlin Heidelberg 2000 Originally published by Springer-Verlag Berlin Heidelberg New York in 2000. Softcover reprint of the hardcover I st edition 2000 The use of general descriptive names, registered names, trademarks, etc. in this publica tion does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Hardcover-Design: Erich Kirchner, Heidelberg SPIN: 10865698 43/3111 43 2 Printed on acid-free paper PREFACE The concept of marketing and managing relationships with customers and other interest groups is at the core of marketing today. In the academic world, the topic is covered in special issues released by numerous journals (e.g. Journal of the Academy of Marketing Science, Journal of Strategic Marketing, Psychology & Marketing), and conferences and conference sessions regularly discuss the advantages of the approach. But relationship marketing is not limited to theory. On the contrary, no service firm or business-to-business company can now do without some form of long-term orientation, and all have implemented at least some elements of the relationship market ing concept. Even in the consumer goods sector, there are a growing number of cases where the traditional orientation towards brand equity is being complemented by a relational focus. As Berry has mentioned, relationship marketing is a "new old" concept. Several important aspects of relationship marketing were already being discussed in the marketing literature. This applies both to central constructs (such as customer satisfaction) and to single elements (such as the management of complaints and after-sales services). Although they do not involve explicit mention of the term relationship VI Preface marketing, a long-term orientation can be found in the network approach of industrial marketing (closely related to the work of the IMP Group), in the work of Gronroos, Gummesson and their colleagues at the Nordic School of Services Marketing and, last but not least, in the concept of customer-focused marketing. The latter concept has seen intensive discussion of topics like customer satisfaction, complaint management and consumer affairs departments since the early 1980s, mostly by German authors (Hansen, Stauss, Schoenheit), but also by researchers from the US and other countries (Goodman, Wikstrom). It was in the summer of 1998 that the Society of Consumer Affairs Professionals in Business asked us to organize a conference which would represent recent developments in relationship marketing theory and practice. Several of the chapters in this book are inspired by presentations made at this conference. We also invited some other leading authorities from the field of relationship marketing to add their own ideas on the management of relationships. The final book now contains the work of 29 authors and is organized into 23 chapters and 7 parts. In essence, it presents and analyzes the state-of-the-art of rela tionship marketing. In doing so, the book addresses four key objectives: First, we want to provide a comprehensive overview of the main findings of relationship marketing theory. We believe that this integration of knowledge is vital, as the research field is becoming increasingly fragmented. In addition, such an overview will help readers new to the relational concept to understand the basic concepts and principles. Second, we want to contribute to the further development of the field. Some of the aspects considered in detail in this book have only been given peripheral treatment in previous research and literature. Third, the inclusion of several case reports and practical examples reflects our wish to highlight how relationship market ing theory has been transferred into business practice. These particular contributions will hopefully be seen as a kind of feedback to theorists and may help to identify misunderstand ings, gaps in understanding and future research areas with more practical relevance. In addition, they may serve as benchmarks for practitioners from those firms which have yet to fully implement the relationship marketing approach. Finally, this book seeks an international perspective, not only through the subjects of those chapters written by Palmer and Botschen, but also through the nationalities of the book's Preface VII contributors. The authors come from Germany, the United States, the United Kingdom, Finland, Canada, and Austria. We very much hope that this book will help overcome (or at least reduce) the existing gap between German and international research on relationship marketing. Of course, such a project is a collaborative venture, requiring the help and support of many individuals. We thank the authors for their tremendous efforts, which truly are the book. We are also especially grateful to Daniel Bornemann, who contributed enormously by organizing the layout of the manuscripts. It was a pleasure to work with Mark Brownlow, who helped us with the book's language and who proved a creative, flexible, and (most importantly) extremely competent guide. Our gratitude also to Carmen Triesch, who was an inspiring and effective partner in the planning and realization of the conference which served as a starting point for this publication, and to Christian Sunderdiek for helping us to conjure up an image of Stephen Brown, international man of mystery. Our final thanks go to Martina Bihn at SPRINGER, whose cooperation and help was greatly valued. The relationships we have developed with all these people are definitely worth intensifying in the future. Thorsten Hennig-Thurau Ursula Hansen CONTENTS Preface v Part A Basic Issues in Relationship Marketing 1 Chapter 1 Relationship Marketing - Some Reflections on the State-of-the Art of the Relational Concept 3 THORSTEN HENNIG-THURAU AND URSULA HANSEN 1. 1ntroduction 3 2. Where We are Today: Important Findings 4 3. Looking Ahead: Some Emerging Perspectives 12 4. Concluding Remarks 18 Chapter 2 Customer Loyalty: Fata Morgana or Realistic Goal? Managing Relationships with Customers 29 HERMANN DILLER 1. Loyalty and Relationship Marketing 29 2. Conceptualization of Customer Bonding and Loyalty 30 3. The Economic Effects of Customer Loyalty 31 4. The Quality of Loyalty 33 5. The Degree of Loyalty: Empirical Impressions 36 X Contents 6. Motivators and Demotivators of Loyalty 39 7. Principles of Relationship Marketing 43 Chapter 3 Relationship Marketing at VOLKSWAGEN 49 KLAUS CHOJNACKI I. Introduction 49 2. Ident!fying the Needfor Relationship Marketing: From Product Orientation to Customer-Driven Change 50 3. Quality not Quantity - What Kind of Information is Neededfor Relationship Marketing? 5 I 4. Giving Customers Reasons to Stay Loyal 53 5. The VOLKSWAGEN Club and Card Concept: Managing Relationships on a One-to-One Basis 53 6. Effective Database Management Must be Part of Relationship Marketing 55 7. Conclusion 58 Chapter 4 Relationship Marketing at LOEWE OPTA 59 OLIVER Hupp 1. A Brief Introduction to LOEWE OPTA 59 2. Relationship Marketing - The LOEWE Perspective 60 3. Summary and Outlook 67 PartB Strategic Options in Relationship Marketing 69 Chapter 5 Patronage and Loyalty Strategies: Understanding the Behavioral and Attitudinal Outcomes of Customer Retention Programs 71 ROBERT M. MORGAN, TAMMY N. CRUTCHFIELD AND RUSSELL LACEY I. Introduction 72 2. Retention Programs and Sustainable Competitive Advantage 74 Contents XI 3. Behaviors vs. Attitudes: The Implicationsfor Customer Loyalty 76 4. The Relationship-Based Customer Retention Program: Building Trust and Loyalty Through the Economic, Resource, and Social Content of Marketing Relationships 78 5. The Outcomes of Customer Retention Programs 81 6. Conclusions 83 Chapter 6 Closeness in Customer Relationships: Examining the Payback from Getting Closer to the Customer 89 JAMES G. BARNES 1. Introduction 89 2. Customer Relationships 91 3. Research Propositions 94 4. Methodology and Operationalization 94 5. Results

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