The contingency value of the partner firm's customer assets in a business-to-business relationship

Abstract

Customer assets in the form of highly satisfied customers are valuable resources that a firm can use to improve its competitive advantage. While prior research has focused on a firm's own customers, this study investigates the partner firm's customer assets in business-to-business relationships. We argue that the partner firm's satisfied customers are a double-edged sword that may promote or hurt the focal firm's performance. An analysis of newly initiated marketing alliances from 1995 to 2009 supports our argument. Our further analyses suggest important moderators that determine the value of the partner's satisfied customers. Specifically, we demonstrate that partner's customer satisfaction generates more positive returns when the marketing alliance is extended to include research and development activities. When the level of product market relatedness is too high or low, the partner's satisfied customers reduce the focal firm's returns. Also, the partner's satisfied customers are more beneficial in a slowly growing market than in a fast growing market. This study extends the scope of interfirm relationship research by looking at business-to-business relationships as an important route by which to access the partner's customer assets. Our contingency framework provides guidance on how firms can build effectively on an external source of satisfied customers.