Understanding the Differential Value of Various Relationship Marketing Metrics on Firm Performance

"DECOMPOSING THE EFFECTS OF NET PROMOTER SCORE ON FIRM PERFORMANCE"This essay utilizes a multi-method design, which intends to better understand the NPS metric and provide a diagnostic test of its effectiveness. Some authors claim it is the most important metric for tracking growth (Reichheld 2003), while others claim that it is an inferior metric compared to other measures such as satisfaction (Keiningham et al. 2007). Despite the contradictions in the academic literature, NPS remains one of the most commonly used marketing metrics amongst practitioners with over 2/3 of Fortune 1000 firms tracking NPS (Colvin 2020). Therefore, the first essay focuses on better understanding the value of the metric, reasons why it may not work in every situation, and potential avenues for its improvement. First, this paper establishes what the literature has previously investigated on the topic through a meta-analysis to better conceptualize the current level of knowledge in the field. These findings are then supplemented with a secondary data analysis from within a single firm to provide a diagnostic test of the measure in comparison to typical satisfaction metrics. Overall, this paper establishes that the transformation of the Net Promoter Score decreases its predictive validity in estimating firm sales, and that the metric's usefulness is contingent upon practitioners' customer orientations. This research covers a topic that is of great interest to marketing managers given the expensive cost of implementing NPS systems and contributes to the current academic literature as to the success of the metric."PREDICTING RETENTION IN B2B RELATIONSHIPS: THE DIFFERENTIAL EFFECTS OF PROACTIVE VERSUS REACTIVE ENGAGEMENTS" The nature of B2B provider-customer meetings have changed due to advances in data management. Now vendors have a better conceptualization than ever before of how B2B customers use products and engage with vendor solutions, and they pass this knowledge onto the customers to increase the value realized from the solutions. Yet, decreased customer commitment to providers from subscription-based relationships has persisted. To provide a baseline understanding of the new norm of engagement within these B2B relationships, this essay relies on the relationship marketing literature. The relationship marketing literature describes how business relationships are dependent upon trust and commitment (Morgan and Hunt 1994). The literature has even progressed to an understanding of which relationship antecedents and strategies are most effective generally (Palmatier et al, 2006), and with regards to across relationship stages (Zhang et al. 2006). A unique dataset with over 15 months of data across over 1,500 client firms within one vendor solution is utilized to understand the benefits of the new engagement strategies. Overall, the findings demonstrate that proactive attention to customers driven by insights gleaned from product usage is rewarded with higher retention. Alternatively, when the engagements are reactive to correct issues that arise, negative effects are shown on retention. These effects are suppressed by high product dependence, and explained by client growth mindsets.