Building customer capital through relationship marketing activities: The case of Taiwanese multilevel marketing companies

Abstract

Purpose

To provide a theoretic framework of the development of customer capital and an empirical verification using Taiwanese multilevel firms.

Design/methodology/approach

The authors used survey research to collect data from members of four Taiwanese multilevel companies. They explored the mediating roles of the drivers of customer equity in the “relationship marketing activities‐customer capita” effect. A total of 306 valid responses were analyzed using structural equation modeling analysis.

Findings

Four types of relationship marketing activities – core service performances, recognition for contributions, dissemination of organization knowledge, and member interdependence enhancement – have significant influences on relationship equity. Relationship equity in turn affects customer capital. Value equity and brand equity respectively have significant effects on customer acquisition and customer retention. Customer acquisition has a significant “feedback” effect on value equity, and relationship equity affects brand equity positively.

Research limitations/implications

The generalizability of this research is constrained due to a non‐probability sample of firms being used to verify the theoretic framework. It is also constrained due to the fact that only customer‐side data were collected and proxy measures of customer capital were used.

Practical implications

Effective and ineffective types of relationship marketing activities have been identified. The causal paths between relationship marketing and customer capital have been illustrated.

Originality/value

This paper sheds light on the approach to building customer capital for membership‐emphasized organization.

Citation

Chang, A. and Tseng, C. (2005), "Building customer capital through relationship marketing activities: The case of Taiwanese multilevel marketing companies", Journal of Intellectual Capital, Vol. 6 No. 2, pp. 253-266. https://doi.org/10.1108/14691930510592834