Relationship Marketing in the Digital Age – Core Vocabulary

A comprehensive set of vocabulary flashcards covering the foundational terms, constructs, and technologies discussed across the lecture notes on Relationship Marketing in the Digital Age.

Relationship Marketing (RM)

A long-term process of identifying, developing, maintaining, and terminating relational exchanges to enhance performance for both firm and customer.

Sustainable Competitive Advantage (SCA)

A benefit customers care about, that a firm delivers better than rivals, and that competitors find hard to copy or replace.

Customer Equity

The total combined value of all a firm’s customers, made up of value equity, brand equity, and relationship equity.

Value Equity

Customers’ rational assessment of quality, price, and convenience offered by a brand.

Brand Equity

The emotional and symbolic attachment a customer feels toward a brand.

Relationship Equity

Loyalty that arises from relational factors such as trust, personalization, or loyalty programs.

Customer Lifetime Value (CLV)

The present value of all future profits expected from a customer over the entire relationship duration.

Commitment-Trust Theory

Morgan & Hunt’s (1994) view that relationship success hinges on two mediators—commitment and trust.

Commitment

A customer’s motivation to maintain a valued relationship and resist switching despite alternatives.

Trust

The belief that a partner is reliable, honest, and will meet obligations in the relationship.

Key Mediating Variable (KMV) Model

Morgan & Hunt’s framework positioning commitment and trust as central mediators between RM activities and outcomes.

Brands (as SCA)

Sources of advantage based on awareness and image that encourage habitual buying and identity benefits.

Offerings (as SCA)

Advantages created through R&D and innovation that deliver superior performance, cost, or service.

Customer Relationship Management (CRM)

Data-driven management of customer information and touchpoints to enhance loyalty and personalize experiences.

Customer Loyalty

A pattern of attitudinal and behavioral preference for one firm over its competitors.

Loyalty Program

An institutionalized incentive system (e.g., points, tiers) designed to increase customers’ attitudinal and behavioral loyalty.

Customer Centricity

Organizational design that structures activities around customer segments rather than products or regions.

Customer Engagement

Voluntary customer behaviors beyond purchase, such as referrals, reviews, or co-creation.

Customer Experience

The total subjective perception formed across all interactions with a firm.

Digital Age

The current era in which most information is stored, processed, and exchanged in digital form.

Web 1.0

Early internet phase enabling websites and e-commerce with multichannel communication (store, hotline, webshop).

Web 2.0

Phase characterized by social media and two-way content sharing, reducing firm control over information flow.

Web 3.0

Era of mobile apps, IoT, and big data that allows real-time personalization and data-rich customer insights.

Web 4.0

Emerging phase driven by AI and AR, automating service delivery and offering immersive product experiences.

Omnichannel

Integration of diverse, flexible channels to offer seamless customer interactions across online and offline touchpoints.

Internet of Things (IoT)

A network of connected devices that collect and exchange data, often prompting automated repurchase or service.

Big Data

Large, complex datasets that require advanced analytics to derive customer insights and personalization.

Artificial Intelligence (AI)

Computer systems able to perform tasks that typically require human intelligence, such as chatbots or recommendation engines.

Augmented Reality (AR)

Technology overlaying digital content onto the physical world to enhance product evaluation and experience.

Media Richness

The extent to which a communication medium conveys detailed and emotional information.

Parasocial Interaction

A one-sided emotional connection that customers feel with a media figure or brand, as if it were a real relationship.

Flow

A state of complete immersion and enjoyment during an online activity, boosting engagement.

Relationship Life Cycle

Four-stage progression—Exploratory, Growth, Maturity, Decline/Recovery—where relationship quality rises then falls.

Relationship Velocity

The rate and direction (increasing, stable, decreasing) of change in key relational constructs over time.

Transformational Relationship Event (TRE)

An unexpected, high-impact incident that strongly disconfirms expectations and shifts the relationship trajectory.

Gratitude

Positive emotion of thankfulness that motivates customers to reciprocate benefits received.

Unfairness

Negative emotion arising when customers perceive their input–output ratio as worse than others’.

Interpersonal Relationship (Type I)

Dyadic bond between an individual customer and a firm representative, driven by commitment, trust, and gratitude.

Interfirm Relationship (Type II)

Multi-level network of ties between two companies characterized by breadth and composition of connections.

Online Relationship (Type III)

Technology-mediated customer-firm bond relying on flow, media richness, and parasocial interaction.

Financial RM Investment

Monetary incentives (discounts, free shipping) offered to encourage loyalty.

Social RM Investment

Personalized gestures (gifts, exclusive events) that signal special status and build emotional bonds.

Structural RM Investment

Value-added services or tools (integrated systems, customized packaging) that are hard for competitors to replicate.

Emotional Mechanism

Customer feelings (e.g., gratitude, unfairness) triggered by RM efforts and mediating outcomes.

Cognitive Mechanism

Customer thoughts and evaluations (e.g., commitment, trust) stimulated by RM activities.

Conative Mechanism

Motivational states (e.g., flow, relationship velocity) that precede behavior in RM contexts.

Behavioral Mechanism

Observable customer actions (e.g., loyalty, engagement) resulting from RM investments.

Field Experiment

Real-world test comparing treatment and control groups to measure causal effects of RM tactics.

Customer Relationship Orientation (CRO)

A customer’s inherent tendency to prefer, seek, and value long-term relationships with sellers.

Loyalists

Customers with strong attitudinal and behavioral loyalty; prime targets for RM expansion.

Dependent Partners

Customers who stay due to high switching costs; respond well if the firm avoids exploiting power.

Sleeping Dogs

Customers whose engagement can unpredictably lead to expansion or defection when activated.

Skeptics

Customers distrustful of RM efforts, showing low responsiveness and high likelihood of defection.

Group-Based Targeting

RM strategy that addresses customers within social or identity-based groups to leverage peer influence.

Norm-Aligned Product Choice

Customer selection of products that fit the expectations and norms of their reference group.

Appraisal Mechanism

Mental process by which customers evaluate the meaning or value of RM efforts within their context.

Data Vulnerability

The perceived or actual risk that personal information could be misused or exposed.

Gamification

Use of game-like elements (points, status, challenges) to increase engagement and motivation.

Digital Identity Cues

Online signals (usernames, avatars, app patterns) that reveal customer identity and preferences.

Virtual Agent

AI-based conversational tool (e.g., chatbot) that simulates human interaction to assist customers.

Digital RM Dark Side

Potential negative outcomes of tech-mediated RM, such as privacy intrusion or loyalty fatigue.

Return on Investment (ROI)

Ratio of financial gain to cost, used to evaluate RM program effectiveness.

Customer Engagement Value (CEV)

Monetary worth of voluntary, non-purchase behaviors (referrals, reviews) contributed by a customer.

Relationship Breadth

Number of interpersonal ties linking two firms across functions or hierarchy levels.

Relationship Composition

Strategic importance and diversity of individuals within the firm-to-firm connection.

Exploration (Migration Mechanism)

Process by which a customer moves toward a stronger relationship state through positive interaction.

Endowment (Migration Mechanism)

Strengthening of a relationship when a firm provides unexpected benefits that boost commitment.

Recovery (Migration Mechanism)

Actions aimed at repairing a damaged relationship and returning it to health.

Neglect (Migration Mechanism)

Failure to invest in a relationship, leading to deterioration in quality and satisfaction.

Betrayal (Migration Mechanism)

Severe violation of expectations that causes abrupt relational breakdown.

Communal State

Relationship state marked by mutual care and high relational quality.

Transactional State

Relationship state focused on discrete exchanges with low emotional attachment.

Transitional State

Intermediate stage where the relationship is shifting either toward or away from deeper engagement.

Damaged State

Relationship condition characterized by low quality, distrust, and high risk of exit.

Media Richness Theory

Concept that richer communication channels convey complex information more effectively, enhancing RM.

Network Theory (in RM)

Perspective explaining how relationship performance depends on the size and structure of inter-firm or customer networks.

Evolutionary Psychology (in RM)

Approach positing that gratitude and unfairness are hardwired mechanisms driving relational behavior.

RFM Analysis

CRM technique evaluating Recency, Frequency, and Monetary value of purchases to assess customer health.

Big Data Analytics

Advanced methods used to extract insights from large, diverse datasets for RM decision-making.

Privacy Signaling

Visible assurances (badges, controls) that a firm protects customer data, enhancing trust.

Social Exchange Theory

Framework suggesting that relationships develop through reciprocal exchange of value and trust.

Status (in Loyalty Programs)

Customer perception of elevated rank within a program’s tier hierarchy, boosting emotional attachment.

Positive Affect

Pleasant emotional state, such as joy or pride, arising from favorable RM experiences.

Surprise

Customer reaction to unexpected events, which can be positive, neutral, or negative depending on context.

Habit

Automatic behavior formed through repeated actions in stable contexts, contributing to behavioral loyalty.

Dependence

Customer’s rational calculation that switching costs outweigh benefits of changing providers.