Online Relationship Formation

Irina V. Kozlenkova · Eric Fang · Bangming Xiao · Minxue Huang

131 citations0/0 files storedJournal of Marketing

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Customer Service Quality and Loyalty Digital Marketing and Social Media Consumer Market Behavior and Pricing

Abstract

As online shopping evolves from being primarily transactional to being more relational, sellers aim to form online relationships. This article investigates online relationship formation, identifies the performance payoffs that result from forming different types of online relationships (unilateral vs. reciprocal), and tests the most effective relationship-building strategies. Study 1, based on a longitudinal buyer-level analysis of an online shopping community, reveals that buyers use community-, seller-, and buyer-generated signals to identify suitable relationship partners and reduce online shopping risk. These signals generally diminish in importance as buyers gain experience but become more important when buyers are forming reciprocal relationships. Study 2 evaluates the dynamic payoffs of online relationship formation (seller-level analysis) on sales; the effect on sales of reciprocal relationships is three times greater and lasts seven times longer than that of seller-initiated, unilateral relationships. Study 3 is a field experiment testing managerially actionable strategies for leveraging relationships to grow online sales. Tenets arising from differences between online and offline relationships, together with the results from the three studies, inform an emerging theory of online relationships.

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References

1960The Norm of Reciprocity: A Preliminary Statement 2003The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms 2007Understanding and Mitigating Uncertainty in Online Exchange Relationships: A Principal–Agent Perspective1 2006Factors Influencing the Effectiveness of Relationship Marketing: A Meta-Analysis 2000No Pain, No Gain: A Critical Review of the Literature on Signaling Unobservable Product Quality 2002Relationship Formation on the Internet: What’s the Big Attraction?2003The Impact of Customer Relationship Characteristics on Profitable Lifetime Duration 2002The antecedents and consequences of trust in online-purchase decisions

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