The Relative Influence of Economic and Relational Direct Marketing Communications on Buying Behavior in Business-to-Business Markets

Abstract

Business-to-business firms spend significant resources in direct marketing to manage close relationships with their customers. Nevertheless, there is limited understanding of how the effectiveness of direct marketing communications varies by value propositions. Typically, direct marketing efforts are geared toward explicitly featuring economic or relational values. To implement an effective communication strategy catering to customers' preferences, firms should understand how customers consistently evaluate these organizational marketing communications, which ultimately affect their buying behaviors. Therefore, the authors analyze marketing messages and employ content analysis to capture the two distinct types of direct marketing communications. Using data from a Fortune 500 business-to-business service firm and a robust econometric model, they find that the (1) effects of economic and relational marketing communication on customer purchase behaviors interplay and vary over time, (2) latent stock of direct marketing communication affects customer purchase behaviors, and (3) evolution of customers' perceived importance can be recovered using transaction data. Overall, the authors provide a marketing resource reallocation strategy that enables marketers to customize marketing communications and improve a firm's financial performance.