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It’s not just “who” you know, but “how” you know them: how social and commercial relationships differentially influence customer discounts

It’s not just “who” you know, but “how” you know them: how social and commercial relationships... The purpose of this study is to contribute to previous research on customer relationships by quantitatively examining differences in the monetary benefits obtained by consumers using social and commercial relationships to make purchases from small and medium-sized enterprises (SMEs).Design/methodology/approachCustomer transaction and relationship data from an SME in the USA is used to quantitatively assess the value of different marketplace relationships in an entrepreneurial context. Tobit regression is used to empirically model and test the impact of specific relationship characteristics on customer discounts.FindingsCustomers using social connections to make purchases obtain significantly larger discounts than customers using commercial connections; customers using direct connections attain significantly larger discounts than consumers using indirect connections (referrals). Interestingly, when examined by connection type, direct and indirect connections do not produce significant differences for social connections, yet they yield notable differences for commercial connections. The findings provide valuable insights to entrepreneurs for understanding and managing customer relationships.Originality/valueThis study empirically demonstrates that social relationships can be both prevalent and influential in the marketplace. The methodology used to quantitatively assess the monetary value associated with different methods of engaging with SMEs allows objective comparisons among different types of customer relationships. Quantification also allows important relationship characteristics to be empirically examined, including how the relationships compare to one another and to nonpersonal marketing activities. Ultimately, these novel contributions generate important insights to help marketers and entrepreneurs better understand customer relationships. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Research in Marketing and Entrepreneurship Emerald Publishing

It’s not just “who” you know, but “how” you know them: how social and commercial relationships differentially influence customer discounts

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References (86)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1471-5201
eISSN
1471-5201
DOI
10.1108/jrme-09-2023-0157
Publisher site
See Article on Publisher Site

Abstract

The purpose of this study is to contribute to previous research on customer relationships by quantitatively examining differences in the monetary benefits obtained by consumers using social and commercial relationships to make purchases from small and medium-sized enterprises (SMEs).Design/methodology/approachCustomer transaction and relationship data from an SME in the USA is used to quantitatively assess the value of different marketplace relationships in an entrepreneurial context. Tobit regression is used to empirically model and test the impact of specific relationship characteristics on customer discounts.FindingsCustomers using social connections to make purchases obtain significantly larger discounts than customers using commercial connections; customers using direct connections attain significantly larger discounts than consumers using indirect connections (referrals). Interestingly, when examined by connection type, direct and indirect connections do not produce significant differences for social connections, yet they yield notable differences for commercial connections. The findings provide valuable insights to entrepreneurs for understanding and managing customer relationships.Originality/valueThis study empirically demonstrates that social relationships can be both prevalent and influential in the marketplace. The methodology used to quantitatively assess the monetary value associated with different methods of engaging with SMEs allows objective comparisons among different types of customer relationships. Quantification also allows important relationship characteristics to be empirically examined, including how the relationships compare to one another and to nonpersonal marketing activities. Ultimately, these novel contributions generate important insights to help marketers and entrepreneurs better understand customer relationships.

Journal

Journal of Research in Marketing and Entrepreneurship – Emerald Publishing

Published: Aug 8, 2024

Keywords: Marketplace relationships; Commercial relationships; Social relationships; Noncommercial relationships; Customer relationship management; Social capital

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