The EFFECTS OF CUSTOMER CAPITAL ON CUSTOMER RESPONSE SPEED AND INNOVATIVENESS: THE MEDIATING ROLE OF MARKETING CAPABILITY

Abstract

Customer capital has attracted a great deal of attention among marketing scholars in recent years. This study explores at first the links between customer capital with firm innovativeness (i.e., the ability to generate new ideas and actions within firms) and customer response speed (i.e., the ability to respond to the customers’ needs immediately). Furthermore, it is analysed how firms’ marketing capability mediates these relationships. For this, a unique environment in post-sanctions Iran is chosen. By using the original survey data from 107 small and medium-sized enterprises (SMEs), our results confirm that durable relationships that a company builds with its customers over the time enhance the market information within firms. This, in turn, enables firms to respond faster to market changes with innovative products and services. Furthermore, the lifetime relationship with the customers enhances the awareness of firms about customers’ needs and demands in a timely manner. Accordingly, it accelerates the process of responding the customers’ requirements before competitors can catch up.