Should I stay or should I go? Customers’ reactions faced with the deterioration of a business relationship

This paper aims to develop a framework helping managers to understand reactions, adopting the supplier perspective, and starting from the idea that the outcome of the degradation process is mainly determined by customers’ reactions. Inter-organisational relationships are sometimes subject to degradation. When incidents arise, and relationship attractiveness decreases, its evolution becomes uncertain.

A case study carried out with a large French industrial company (FabIndus) specialised in the production of supplies destined to a large variety of business sectors. In all, 26 semi-structured interviews were conducted with staff members of FabIndus and clients’ representatives identified as having recently been confronted with deterioration in their relationship.

The paper finds that customers’ reactions vary according to the nature of the business relationship and the customer commitment when degradation begins. Using two types of commitment and the exit–voice–loyalty–neglect model, it is possible to identify four types of reactions in the situation of the deterioration of a relationship. For each one of the reactions, the paper defines the response strategy that suppliers may take on.

The paper underlines the importance of a segmented view of business behaviours faced with the deterioration of a relationship. This can be helpful to elaborate differentiated response strategies, to avoid mutual misunderstandings.