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BUSHOR-1175; No. of Pages 10
Rethinking customer relationships
Lance A. Bettencourt a,*, Christopher P. Blocker b, Mark B. Houston c,Daniel J. Flint d
a Partner, Service 360 Partners & Distinguished Marketing Fellow, Neeley School of Business,Texas Christian University, U.S.A.
bCollege of Business, Colorado State University, Fort Collins, CO 80523-1201, U.S.A.cMays School of Business, Texas A&M University, College Station, TX 77843-4112, U.S.A.dCollege of Business Administration, University of Tennessee, Knoxville, TN 37996, U.S.A.
Business Horizons (2014) xxx, xxx—xxx
Available online at www.sciencedirect.com
ScienceDirectwww.elsevier.com/locate/bushor
KEYWORDSBuyer-sellerrelationships;Relationshipmarketing;Collaboration;Partnerships;Value creation
Abstract Success in business markets demands going beyond satisfactory exchangeswith customers. Conventional wisdom therefore dictates that firms must build closecustomer relationships. Yet, unfortunately, the meaning of a close relationship fromthe customer’s viewpoint can get lost in translation. We find that, contrary to thewidely held use of the relationship metaphor in business, customers do not actuallywant interpersonally meaningful relationships; in fact, these are often viewed withcynicism and are seen as a burden. Rather, customers seek value creation attuned totheir particular contexts to drive instrumental objectives. This article highlights thethorny, often veiled aspects of customer relationships and re-directs attention to theessential connections that help suppliers successfully co-create value with customers.# 2014 Kelley School of Business, Indiana University. Published by Elsevier Inc. Allrights reserved.
1. Does your customer want arelationship?
How often have budding account managers beentold that they need to develop close customerrelationships to succeed? Although it is essentiallychiseled in granite, we critically reexamine thisconventional wisdom and question how helpful it
* Corresponding authorE-mail addresses: [email protected]
(L.A. Bettencourt), [email protected](C.P. Blocker), [email protected] (M.B. Houston),[email protected] (D.J. Flint)
0007-6813/$ — see front matter # 2014 Kelley School of Business, Ihttp://dx.doi.org/10.1016/j.bushor.2014.09.003
is for managers to think about business partner-ships like they would a marriage or a friendship.Does the process of building intimate personalbonds in a romantic relationship provide usefulinsight for creating the value that customers areseeking?
Our research suggests that most buyer-seller re-lationships, when compared to true personal friend-ships, come off as inauthentic–—or ironic at best.Business relationships can play a significant role increating value for organizations. Yet if such relation-ships are expected to be something they are not,psychological tension can be created in the lives ofbuyers and sellers, and valuable resources can bemisdirected.
ndiana University. Published by Elsevier Inc. All rights reserved.
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2 L.A. Bettencourt et al.
The key question guiding our research is this: Ifcustomers say they want close relationships withsuppliers, does this mean that they want genuine,personal relationships that can transcend their pro-fessional interests in the situation or those of theircompany? And, from a practical perspective, is thepopular relationship metaphor a useful mental mod-el for guiding effective business interactions?
A quick review of speeches, articles, and theeveryday language of executives suggests an em-phatic ‘yes’ to these questions. It is also common tosee job titles such as Relationship Manager or Sup-plier Relationship Director for downstream sales orupstream procurement roles. However, frequentevidence of a dark side to business relationshipssuggests that the answer to our questions may notbe so clear cut.
To shed light on the nature of relationships in abusiness-to-business (B2B) context, we conducted amajor study using phenomenological depth inter-views with 38 commercial buyers from 25 industries(see Appendix). As expected, our buyer interviewsincluded frequent references to dating, marriage,divorce, and friendship to explain business interac-tions with suppliers. They even included intimaterelationship language, such as ‘getting underthe covers,’ ‘finding the ring,’ and ‘seeing behindthe kimono.’ Yet, after months of digging deeperinto the transcripts to unpack exactly what theseterms and phrases actually mean to customers intheir business world context, we were surprised tofind customers’ language linked to very differentthoughts and experiences than the traditional rela-tionship meanings.
Our findings offer insights to critically challengethe mental models that managers apply to develop-ing valuable customer partnerships. These insightsalso generate new ideas for the types of connectionsthat can, in fact, facilitate superior value co-creation with customers.
2. B2B relationships enhanceloyalty. . .except when they don’t
Similar to interpersonal relationships, B2B partner-ships are commonly believed to evolve through stagesof exploration, formalization, maturity, and decline(Dwyer, Schurr, & Oh, 1987; Jap & Anderson, 2007;Ring & Van de Ven, 1994). And while the term rela-tionship can simply refer to repeated business inter-actions, the prevailing usage by B2B scholars impliesintimate social bonds (Wilson, 1995). Businesses havesubsequently internalized this philosophy and theiractions have followed suit. Many companies, forexample, provide funds for salespeople to befriend
their clients through gifts and events, and industrygurus encourage companies to ‘‘treat customers asbest friends’’ (Geller, 2006, p. 22) and ‘‘make afriend, not a transaction’’ (Tan & Steinberg, 2007,p. B6).
Yet, while forging close relationships is a seem-ingly positive goal, researchers continue to uncovera troubling number of exceptions to the expectedbenefits. For example, researchers are astonishedwhen close personal relationships don’t preventcustomers from switching to new providers(Wathne, Boing, & Heide, 2001). Dismay is ex-pressed upon finding that partners in very closebusiness relationships are more likely to cheat thanthose in less-close relationships (Wuyts & Geyskens,2005). Commitment to a business relationshipcan decline even when trust remains unbroken(Lazzarini, Miller, & Zenger, 2008; Palmatier, Hous-ton, Dant, & Grewal, 2013). And a buyer can indi-cate having a good salesperson relationship, butthen avoid them to save time (Palmatier, Scheer,Evans, & Arnold, 2008).
It seems that something may be askew in howsuppliers think about buyer needs and what makesbusiness partnerships work (Maddox, 2008; Tuli,Kohli, & Bharadwaj, 2007; Wathne et al., 2001).Perhaps conceiving of repeated B2B interactions viathe metaphor of a relationship–—a term that impliespersonal intimacy and a degree of selflessness–—isnot as helpful as it seems on the surface. What arethe limits of the relationship metaphor in aiding tounderstand and effectively manage B2B interac-tions? If the relationship metaphor has limits, whatmodel should firms follow to successfully co-createvalue with customers? Our study sheds light on thesetypes of questions and proposes a new metaphor.
3. Does the relationship metaphormask reality?
The relationship metaphor is so entrenched in con-temporary business psyche that it is rare to speak ofsuch interactions as anything but relationships(Wilson, 1995). Yet, while a metaphor can createpowerful imagery to understand some aspect of life,it can also misdirect attention away from reality ifthose images do not map onto the essence of thereal-life experience (Lakoff & Johnson, 1980).Months of analyzing buyers’ stories-in-context re-vealed a host of ways that the relationship metaphordoes, in fact, mask reality in business.
Applied to business interactions, the relationshipmetaphor extols the virtues of salespersons craftingsocial bonds, close personal relationships, and eventrue friendships with buyers (Bolton, Smith, & Wagner,
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Rethinking customer relationships 3
2003). Thus, when a business person tries to build aclose, strong, or good relationship, the underlyinglogic exalts the goal of developing an expressiverelationship with a customer. An expressive relation-ship revolves around genuine, intrinsic, emotionalexchanges that transcend the parties’ everyday busi-ness roles. Pursuing loyalty through this type of rela-tionship is a central theme in the relationshipmarketing school of thought and serves as the coreidea for countless corporate sales training models.
3.1. How buyers use relationshiplanguage
We found stark irony across our interviews: Althoughbusiness buyers do make common use of relationshiplanguage, the meanings they attach reveal a prima-ry concern with achieving instrumental (not expres-sive) objectives. Rachel laughed when thinkingabout the surface nature of business relationships:‘‘We always try to develop strong supplier relation-ships because if we work together, it benefits theclient. [Yet], it’s like Pollyanna–—‘We’re all friends.’But it’s really competitive.’’
Even intimate phrases such as ‘getting close,’‘endearing ourselves,’ and ‘rekindling the relation-ship’ were used to refer to processes for workingwith a supplier to achieve business goals–—not fordeveloping expressive relationships. Consider howCurtis compared supplier evaluation to dating: ‘‘Yougo out with one girl. You like this quality about her.You don’t like this quality. The next girl you date hasthis quality, but you don’t like this one. So, you justget a composite after a while.’’ The interviewerinterjected, ‘‘Till you find the perfect woman?’’Curtis responded in all seriousness: ‘‘Well, thenyou compromise. It’s just a business thing.’’
Table 1. A comparison of expressive and commercial re
Relationship Stage Expressive Relationship M
Dating j Getting to KnowOne Another
Creating an intimate attaSeeing another person forreally are
Building a Stronger, CloserRelationship
Spending intimate time toGetting validation of pers
Marriage j In a MatureRelationship
Intertwining identities anInterdependent emotions,and behaviors
Responding to Needs Comforting one another;
personal needs; Being a ssocial support
Divorce j Severing a CloseRelationship
Loss of social support; PerFear, anxiety, and depress
In fact, buyers in our study see business relation-ships as tenuous and fragile when instrumental goalsare not being met or could be better met elsewherein the market. For instance, Wes shared how he nolonger considered it important to be married to asupplier after his company realized that a competi-tive supplier had ‘‘a quality product at a third of thecost.’’
Buyers also use relationship language to describeeffective organizational collaboration. Sean saidthat the ‘‘marriage analogy applies’’ because asupplier ‘‘relationship [requires] mutual respect.’’He elaborated with a story that defined respect interms of supplier flexibility, not as an interpersonalideal. To Miguel: ‘‘A good relationship [represents]somebody you can have a discussion with–—havethem actually listen, respond, and be able to makea decision. So, it’s not a personal or touchy-feelykind of thing; it’s from a business perspective. ‘Whatcan you really do?’’’
Ultimately, when buyers spoke of good, close,and strong buyer-seller relationships, they referredto working well together to achieve company ob-jectives. Said Drew: ‘‘The foundation of the rela-tionship is that we have to do what’s right for ourfirms, so there are boundaries. In a friendship, yourcommitment is to the other person. Business rela-tionships should always be built around what’s in itfor my company.’’
Table 1 provides a side-by-side comparison of howbuyers use terms like ‘dating,’ ‘getting close,’ ‘mar-riage,’ and ‘divorce’ in comparison with the everydaymeanings for these terms in expressive relationships.Across aspects of a relationship, the comparisonreveals that whereas expressive relationships em-phasize value based on intimate attachments, inter-dependent emotions, and social support, business
lationship meaning
eaning Commercial Buyer Meaning
chment; who they
Understanding business processes,technologies, and objectives
gether;onal worth
Adding more services; Overcomingbusiness issues; Engaging in jointwork projects
d roles; thoughts,
Exceeding performance criteria;Having joint processes that workefficiently and effectively
Meetingource of
Customizing processes and productsto meet work objectives; Addressingservice failures appropriately
sonal guilt;ion
Operational downtime; Taking time,effort, and cost to replace; Politicalrisk in the firm
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4 L.A. Bettencourt et al.
buyers emphasize alignment of objectives, customi-zation of processes, and commitment of resourcestoward goal achievement.
3.2. How the relationship metaphormisleads
The common meaning of a relationship encouragessales behaviors that depart from buyers’ reality anddesires. The relationship metaphor, for example,points salespeople toward sharing personal details,spending time with buyers, providing emotionalsupport, and seeking to meet personal buyer needs.On the surface, these would seem to be universallyhelpful behaviors or at worst fairly harmless, even ifthey are believed to be phony by the buyer.
However, our interviews revealed that miscon-ceptions of relationships do mislead and causeharm. For example, we found evidence that whensalespersons put too much stock in the value ofpersonal relationships as a basis for success, theyfail to prepare for the reality of customer demandsand risk losing valuable business. For instance,Darren spoke of how a long-term supplier wasstunned when Darren’s firm cut it out of the picturefor another, cheaper supplier. Similarly, Alex sharedhow his company avoids any suppliers withsalespeople it perceives to be ‘glad-handers’ and‘backslappers.’
Buyers also experience the sting of a miscon-ceived relationship metaphor. They told us aboutthe psychological stress they experience whenspending lots of informal time with suppliers andconcurrently attempting to maintain their integritywithin their own firm. Because buyers recognizetheir role as agents of the firm (Ted: ‘‘The companyis buying my service.’’), many shun attempts bysalespeople to develop friendships (Tony: ‘‘We needsuppliers who are going to help us compete and notbe buddy-buddy or take us out to lunch or dinner.’’)and find no value in them (Wade: ‘‘What I don’tvalue are boondoggles, freebies, trips, and thingslike that. That’s not value to the system.’’). Manybuyers also expressed tension at the idea of havinginterpersonally meaningful relationships in theirorganizational role. In other words, practicing theconventional idea of building close relationshipswith buyers is not only ineffective, it is sometimescounterproductive and can hurt one’s credibility.
Looking at relationships through the eyes of cus-tomers, we conclude that recommendations fo-cused on building expressive relationships can bemisleading at the least and detrimental to thepursuit of goals for both buyers and sellers atthe most, because it misdirects scarce resourcesof time and money. Our findings reveal that supplier
representatives would be better off sharing opera-tional strengths and weaknesses, spending timeunderstanding buyer objectives, aligning processes,and putting in place mechanisms to increase theefficiency and effectiveness of joint work.
3.3. How buyers manage relationshiptension
The buyers in our study wrestled with the challengeof blending relational beliefs with practical, orga-nizational-driven realities. In this pursuit, we foundthat they experienced significant emotional tensionas they employed three general strategies. First, wefound that some buyers acted relationally in orderto facilitate smooth exchanges. Although they didnot hold sincere expressive feelings toward theirsuppliers, they behaved according to friendly andrelational social norms because this provided sociallubricant to the dealings.
Many buyers who employed this approach re-ported an ethical dilemma: they did not want tobe seen as a manipulator, but needed to gain lever-age and get the deal done. In the course of business,personal relationships were sometimes misrepre-sented and promises were misconstrued, often re-sulting in animosity between parties. When asupplier and buyer share a common goal focus,however, the buyer can keep his/her focus on orga-nizational objectives without the polite fiction, asone buyer referred to it, of pretending that friendlyinteractions are anything more enduring.
Second, we found that some buyers, often as amatter of principle, explicitly chose not to act inrelational ways. Rather, they intentionally engagedin arms-length transactions and refused any supplierovertures that added a social component to businessinteractions. ‘‘I like to distance myself,’’ voicedTed. ‘‘I want the freedom to do what’s right forthe company and sometimes that means gettingangry. I can sleep well at night by distancing my-self.’’ Unfortunately, this approach led buyers tomiss out on opportunities to co-create greater valuevia friendly–—versus oppositional–—interactions.
Finally, we observed many buyers who enact ahybrid strategy via which business interactions areconducted at arms-length, but friendly interactionswith a supplier are allowed to occur outside of workhours. In essence, these buyers sought to create apersonal-professional boundary to avoid the ethicalconundrum posed by customer relationships. Whenwe probed more deeply into the experiences ofbuyers who took this approach, however, we foundstark differences between buyers’ supplier friendsand their true friends from outside the realmof work. In particular, buyers disclosed far more
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personal information to real-life friends than sup-plier friends and expected relationship continuationwith the former over the latter if changing lifecircumstances intervened (e.g., relocation, newjob, new supplier).
In sum, our research cautions salespeople toavoid being distracted or seduced by a buyer’sstated desire to build a stronger, deeper, or closerrelationship. Conversational usage of these termsimply mutual caring that transcends settings andresults in emotional interchanges, interdepen-dence, and a validation of personal worth. Butrelationship language used by buyers in a B2B con-text, as revealed by our analyses, connotes thesharing of business objectives, collaboration onjoint projects, adding services and/or increasingthe size of interactions, and overcoming partnershipissues: concepts that are far more instrumental thanexpressive. While the relationship metaphor canhelp convey certain structural realities, such as‘marriage’ referring to a long-term contract, wefound that it masks the reality that customers arefundamentally striving to achieve instrumentalgoals.
So, do your business customers want a relation-ship with you? The answer is both yes and no. Yes,they do–—but not in the conventionally held view of atrue, expressive relationship. Rather, they want towork with a supplier in a way that transcends a quidpro quo transaction to achieve important instru-mental objectives for themselves and their compa-nies.
4. View relationships as connections
The relationship metaphor highlights the collabora-tive nature of business interactions (e.g., give-and-take, win-win). However, it does not provide pre-scriptive guidance about how to engender collabora-tion to co-create customer value. Rather, itintroduces confusion by emphasizing emotional re-wards and personal identity and de-emphasizing in-strumental motives and organizational connections.
We propose that a more apt metaphor for viewingand managing commercial interactions is connec-tions. Connections link things together for an instru-mental purpose. The metaphor invokes conceptsfrom the fields of electricity (i.e., interfaces be-tween electrical circuits) or computer science(i.e., connections to direct information flow). Acrossthe variety of connection types, the usual intent forthose who design and use connections is to facilitatethe flow of resources among nodes or entities within anetwork. Users select network connections they seeas reliable for the fulfillment of their resource needs.
Likewise, connections among the individuals ofsupplier and customer organizations are the keypathways for effective collaboration. Althoughrelationships–—including those at work–—are ahealthy and important part of life (Sluss & Ashforth,2007), we find that the adverse constraints of beingan agent representing a company with a sellermakes it difficult for individuals to be in a relation-ship without creating undesirable tensions. Connec-tions provide a fruitful and human alternative.Buyers can connect when it is relevant for goalachievement and disconnect when it is not. Onlythe connections that can reliably generate value arerepeatedly formed and re-initiated over time.
The connections metaphor helps reorient focusfor buyer-seller interactions on achievement of im-portant goals. Significantly, it retains the benefits offriendly interactions while avoiding the entangle-ments of a true, expressive relationship–—which areoften at odds with organizational responsibilities.
4.1. Design connections to facilitatecollaboration
The connections metaphor also places priority onthe design of connections. The structure and stabil-ity of interactions across supplier and customerorganizations are what shape connections. Inas-much as research shows that people’s social con-nections determine their influence, communicationpatterns, and access to resources, it is critical thatconnections between organizations be carefully de-signed to facilitate collaboration (Palmatier, 2008).
From the buyer interviews, we identified sixdesign elements that a supplier should considerwhen structuring its connections to support valueco-creation with customers. Table 2 links each de-sign element to a primary means of making valuableconnections a reality via who is connected (struc-ture), how they are connected (process), andwhen they are connected (timing). Table 2 also re-inforces the design focus of buyer-seller connectionsto provide reliable access to supplier resources.
4.1.1. Peer connectionsFor effective collaboration, many buyers said thatthere must be regular contact between the makersand the users at the grass roots of supplier andcustomer organizations. When companies speak ofopen communication, for example, they mean notonly what is communicated, but also that ‘‘lower-level employees have interactions with their peersat supplier organizations,’’ as Matt shared, so ‘‘theycan appreciate what value each independent partybrings to the table.’’ The goal is to better align tasksand address issues more quickly. Stated Larry: ‘‘If
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Table 2. Connection essentials audit questions
Connection Essentials Connection Principles Audit Questions
Peer Connections Structure — Access � Are connections in place among peers at the supplierand customer organization from the shop floor to theexecutive suite?
Familiar Connections Structure — Reliable � Do the connections between the supplier and customerorganization support a level of personal familiarity thatis necessary for effective collaboration?
Clear Connections Process — Access � Is it clear to customer connections who to contact and howto contact them for particular decisions, tasks, or issues?
EmpoweredConnections
Process — Reliable � Do connections to the customer organization have theauthority to make decisions and take actions that matterto customers?
Regular Connections Timing — Access � Do the connections between the supplier and customerorganization happen on a regular and frequent basis?
Stable Connections Timing — Reliable � Are connections between the supplier and customerorganization sufficiently stable over time? Are transitionsplanned to be as painless as possible?
6 L.A. Bettencourt et al.
you look at the relationship we have with Supplier Y,excellent is probably the term you would use. Wehave good open communications, whether it is thetechnical people talking to each other directly asthey should or the scheduling people talking to eachother on both sides as they should.’’
4.1.2. Familiar connectionsAlthough commercial interactions are not focusedon building expressive relationships, familiaritywith another person provides a basis for trust amongbusiness connections (Cialdini, 2001). Multiplebuyers, such as Miguel, shared how informal conver-sations provide social lubrication that ‘‘supplementswhat you’re doing from a business perspective,’’even though the focus is not on developing friend-ships that in any way transcend the business task athand. When recalling a few troubling supplier inter-actions that turned positive after some in-personinteraction, Ron concluded: ‘‘I guess we’re socialcreatures. You don’t ever get past the defensivenessor the non-understanding until you go see them andspend the time with them to get to know them andwhat’s going on, and help them understand the sameabout you.’’
4.1.3. Clear connectionsCollaboration is hindered when it is not clearwhom to contact regarding a particular decision,task, or issue. It is important to be transparentabout who does what within the organization andhow that person/unit may be contacted, especial-ly when problems arise. Recalling a past frustra-tion, Roberta said: ‘‘One day I spent over 80% ofmy time trying to figure out whom to contactabout an ongoing problem. I went through the list
and was absolutely beside myself by the time I gotto the VP. There’s no excuse for that. I lost time.I lost my patience. They really hurt themselves[in] that.’’
4.1.4. Empowered connectionsSome buyers spoke about the importance ofbeing connected to a supplier’s senior leadership.Certainly, there is a symbolic element to suchconnections. However, practically speaking, theprimary goal in seeking such connections is accessto decision makers ‘‘whenever you need some-thing more strategic.’’ As Sean shared: ‘‘We don’tnecessarily look for rank to come in just becauseit’s rank. It’s because that’s what gives you quickanswers. There are companies–—very few–—set upwhere that little person can do it just as well asthe president, business manager, or anyone else.They have empowerment.’’ At all levels, custom-ers valued interacting with supplier personnel whocould take action without delays for administra-tive approval.
4.1.5. Regular connectionsFrequent connections are important for successfulcollaboration. As Matt shared: ‘‘One of the biggestreasons why some of these relationships fail is be-cause you don’t have that regular contact.’’ Regularconnections serve three primary benefits. First, asJoe shared, they help people ‘‘know each otherenough to where they pick up the phone and callif there’s an issue on either side.’’ Second, interact-ing on a regular basis helps clarify what each partycan and cannot do. Third, connecting on a regularbasis, Wade said, ‘‘forces you to get together andtalk about issues and opportunities.’’
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4.1.6. Stable connectionsTrust is built up over time. Getting comfortableworking with someone also takes time. When con-nections are broken due to job rotations, turnover,or the transfer of key personnel, connections mustbe (re)formed, and this can cause many problems.Important partnerships may fail because of the lackof stable connections (Hutt, Stafford, Walker, &Reingen, 2000). Acknowledging that some suppliers‘‘don’t understand the value of building trust’’through stable connections, Nate offered: ‘‘[With]some suppliers, it is like a big turnstile. Here is yoursalesman today; here is his boss, here’s his boss.Take a picture because 2 months from now, they areall going to be different.’’ For various reasons,connections cannot totally be kept in place. As such,it is important to plan for making transitions assmooth as possible.
Connections are the conduits by which value iscreated with the customer. With the design priori-ties in hand, a company can use the audit questionsin Table 2 to assess where its connections are strongand weak and then implement an action plan toenhance them.
4.2. Manage connection ‘occasions oftruth’
In service industries, the building blocks of customersatisfaction and loyalty are known as moments oftruth: specific instances when the customer inter-acts with the service firm. In collaborative partner-ships, there are occasions of truth: specificsituations in which the customer is especially at-tuned to the presence or absence of collaborativevalue, thereby drawing on the connections in place.When discussing good, close, or strong relationships,buyers often spoke of specific occasions that built,reinforced, or destroyed them.
From the buyer interviews, four types of occa-sions put a spotlight on connections: special initia-tives, changes, problems, and sales interactions.Although the four occasions are perhaps not exhaus-tive, taken together, they draw attention to theimportance of connections when there is a breakfrom the status quo and/or when uncertainty isprevalent. And though there is overlap among thefour types of occasions, we discuss them separatelybecause we believe that each requires unique sup-plier planning to be successful.
4.2.1. Special initiativesBecause buyers view themselves as extensions oftheir firms, their stories of good and bad supplierinteractions often revolved around special corpo-rate initiatives or critical challenges, such as the
buyer being tasked with making major cost reduc-tions. Any initiative tied closely to corporate objec-tives is an opportunity to help a buyer either lookgood or lose sleep. This puts a spotlight on how asupplier collaborates. Doug, for example, spoke ofcommitment in terms of collaboration while reflect-ing on an initiative to optimize supply chain perfor-mance. Joe’s best experience with a suppliercentered around reducing cost in the supply chain.And Nate spoke about the impact of supplier(in)flexibility in the context of opening a new plant.
Special initiatives call attention to the priority asupplier places on buyer needs. Suppliers that excelin connections for special initiatives view customersas collaborators pursuing mutually beneficial goalsrather than as adversaries with conflicting agendas.When asked how a particular supplier was able tounderstand his company’s needs so well, Tony notedthat the supplier’s values directed these connec-tions with his company: ‘‘They have a culture thatdictates they do it. It is not just us that they know.They know everybody like that. They drive thatamongst their people. They make that important.They send people into our facilities to meet us andfind out what our expectations and goals are.’’ Incontrast, Tom shared a story of a supplier that‘‘needs to go away’’ because ‘‘they have no interestin figuring out what our real strategy is or how theycan play a part in it. They’ve got their own agenda.’’
4.2.2. ChangesWhen something stands out from its surroundings,we naturally pay more attention to it. An occasion ofchange was seen by buyers as an opportunity for thesupplier to show its true colors. Don, for example,described a price increase that surprisingly led tofavorable perceptions of the supplier because thesupplier communicated openly about cost increasesthey were facing: ‘‘They were very good aboutthrowing out specific numbers.’’ When a supplierwas bought by another company, Tom shared howimpressed he was that ‘‘the new owners called us upand said ‘We want to come meet you guys; you’re akey part of our business.’’’ Doug, Hunter, Joe, andothers spoke about favorable or unfavorable han-dling of changes in the supplier team. As Dougexplained: ‘‘You’re always going to question if thepeople coming in are going to have the same com-mitment as the people going out.’’
Changes are inevitable. To be successful, thesupplier must anticipate potential changes andhow connections with the buyer will need to re-spond. It must also create a culture that encouragesopen communication with customers, and guidesappropriate employee actions when adaptability isrequired. Sean aptly described this perspective in
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relation to the inevitability of people changing: ‘‘Wehave had long-term relationships with people thatgo bad because people change at the top. That iswhy I think it is necessary for a company to havephilosophies and internal objectives that are biggerthan the people that come and go. I would say thatthe number one cause of divorce is that peoplechange. The worst thing a company can do is allowindividual personalities to overcome the corporatephilosophy.’’
4.2.3. ProblemsThere is no better time for a supplier to demonstrateits customer commitment than when problemsarise–—whether caused by the supplier, the custom-er, or outside circumstances. As Tony said: ‘‘I havealways felt that the defining moment with a supplier[lies in] how they take care of you [during] a prob-lem. People who say ‘Service is our middle name’–—If they don’t come through in those times, you tendto question their commitment to you or if they arereally worth it.’’ When problems were handledpoorly, buyers shared how they felt stonewalledand how it led to a decision to change suppliers.In contrast, as one buyer shared, stepping up toresolve problems demonstrates a willingness to do
Table 3. Connection occasions audit questions
Connection Occasion Description
Special Initiatives Corporate initiatives orchallenges, such as amajor cost reduction
Changes An occasion of change,such as a price increaseor new team leadership
Problems Problems caused bythe supplier, thecustomer, or outsidecircumstances
Sales Interactions Sales and other earlyinteractions offer‘‘signals’’ or ‘‘clues’’of collaboration focus
what it takes to make the customer successful. ‘‘Youwant to deal with those people,’’ said Tony.
When problems arise, it should be clear whom tocontact for a particular issue, and supplier contactsmust have latitude to make decisions to resolveissues. As Nate summarized: ‘‘I would say that Idon’t even hear about 70%—75% of the problemsthat we experience until they’re already taken careof. The guy in our plant will be calling his counter-part and saying ‘Gee, how about such and such?’They fix the problem, and that is the essence of agood relationship.’’ Effective problem resolutionalso depends on regular communications amongbuyer and seller connections. As Bill explained:‘‘We ran out of supply and it was a surprise to us,as opposed to them communicating to us up front. Itwasn’t a relationship where they picked up thephone and said, ‘Hey, we’ve got a problem. We justfound it and here’s how we’re trying to fix it. Ineeded you to know, and I wanted you to hear itfrom me.’ It was ‘Well, let’s just move it and see ifthey find it.’’’
4.2.4. Sales interactionsBuyers search for signals or clues that thewalk matches the talk during sales and other early
Audit Questions
� Do company employees take the time necessaryto understand buyer objectives when they aretasked with a special initiative?� Do company policies encourage employees topartner with buyers in an effort to meet theirobjectives? Are special resources available to help?� Does the company anticipate and plan foremployee adaptability and possible customerreactions to changes in the supplier-customerrelationship?� Does the company communicate in an open andtransparent manner about upcoming and ongoingchanges in the supplier-customer relationship?� Does the company have mechanisms in place toanticipate the most common problems customersexperience?� Is it clear who the customer should contact whena problem comes to their attention? Are customercontacts empowered to resolve problems?� Is the company proactive in sharing informationabout impending problems?� Are salespersons and other staff aware of the cluesbuyers use to make inferences about the company’svalues?� Are salespersons and other staff motivated todeliver exceptional service experiences during thesales process?
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Appendix. About the research
We conducted in-depth interviews, lasting1—2 hours each, with 38 buyers from 29 compa-nies across 25 industries. Participants had deepexperience working with individuals from sup-plier firms and reflected diverse company types,backgrounds, and characteristics, which pro-vided a range of buyer experiences and per-spectives. Following Glaser and Strauss (1967),we continued to expand our sample until wereached a point at which no new insightsemerged regarding the phenomenon and re-search questions.
In these interviews, we followed an unstructuredprotocol that encouraged buyers to speak freelyabout their professional and personal experien-ces with their suppliers; that is, a phenomeno-logical interview approach as discussed byThompson, Locander, and Pollio (1989). Weprobed buyers’ perceptions of supplier interac-tions that they described as meaningful, payingparticular attention to nuances of meaning re-garding any relationships that participantsreferred to as close, good, and/or personal.These interviews were transcribed, resulting inover 1,200 single-spaced pages of text repre-senting our participants’ experiences.
Using approaches that conform to the stand-ards of analytical rigor held by academic dis-ciplines relying on qualitative data, weanalyzed these interviews over a year’s timeto glean insights into the meanings held bybuyers when they used relationship-like termsand buyers’ perceptions of what led to close ordistant supplier relationships. Our analysescomprised hermeneutic processes in whichthe interview texts were interpreted frommultiple perspectives:
Rethinking customer relationships 9
interactions. Buyers including Doug, Darren, andTony spoke of warning signs such as ‘‘a companythat likes to play their cards close to their vest’’ ortaking days until ‘‘someone calls you back.’’ Twobuyers specifically spoke about continuity amongemployees as a clue. As Sean explained: ‘‘Seniori-ty is not an excellent way to measure anything,but it is a tool. If the sales guy says he is the thirdone in the last 2 years: problem. If he has only beenthere a year, but he replaced a guy that had beenthere for 15 years: okay.’’ Martin’s favorable assess-ment of a particular supplier during the sales processrested on the ‘‘continuity in their employees.’’ As hesaid: ‘‘They appear to be loyal to their employees,which suggests that they won’t have any problembeing loyal to their customers.’’
Suppliers that excel in sales connections useselection, training, and leadership to encourageattitudes (‘‘looking out for us’’) and behaviors(‘‘have them actually truly listen’’) that customersuse as signals of willingness to collaborate long-term. They also design their goals, strategies, andreward systems to align salesperson attitudes andbehaviors with customer needs so that no oppositeagendas are introduced unintentionally. For exam-ple, Bill recounted a story of a supplier that wasnickel and diming his company based on misalignedincentives. When he spoke with outgoing managersof the terminated supplier, they confirmed his sus-picions by sharing: ‘‘We were incented to be ascostly as you would tolerate.’’
Each occasion of truth offers an opportunity tosupport value creation and win or lose customertrust. A supplier must ensure that it is prepared toco-create value with the customer by putting inplace the right connections. Table 3 offers a sum-mary of valuable audit questions tied to each con-nection occasion.
5. It’s time to move on
Clearly, product, price, and service delivery are allcritical to supplier success. Increasingly, though,they are simply ante to the game. The differencebetween superior and mediocre suppliers nowcomes down to who supports value creation thatextends beyond the minimum of what must be done.
Suppliers must be cautious, however, about theprospect of creating customer value through cus-tomer relationships. Although a surface examina-tion of buyer language and a legacy of scholarlyarticles suggest an intuitive appeal to this approach,deeper exploration reveals that it is misleadingand potentially detrimental. We found that buyersrelied on the relationship metaphor to illustrate the
reality that value is best achieved when two orga-nizations work together to attain common instru-mental objectives.
As such, we believe it is past time to tap thebrakes on the relationship metaphor and shift thediscussion to connections, in order to understandbusiness interactions. Consistent with how custom-ers see it, success demands that a supplier focus itsactivities on value co-creation through carefullydesigned customer connections. Accordingly, cus-tomers gain a compelling reason to choose thatsupplier time and time again.
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1. word-level analyses that probed the mean-ings attached to key words and phrases;
2. individual-level analyses in which the expe-riences of each respondent were carefullyassessed; and
3. theme-level interpretations that emergedacross participants (Arnould & Epp, 2006;Glaser & Strauss, 1967; Thompson et al.,1989).
10 L.A. Bettencourt et al.
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