Relationship marketing can mitigate product and service failures

Relationship marketing is beneficial to firms because it can foster customer loyalty and re‐patronage behavior. Consumers engaged in relational exchanges are more satisfied than those in discrete transactions because of the ease and psychological comfort of purchasing from a familiar company. This research investigates the power of relationship marketing to mitigate in two situations. One exposes consumers to poor product performance and examines their levels of trust, commitment and satisfaction. The second presents a product failure that is followed by a lapse in service recovery and measures satisfaction and exit behavior. The findings of both studies suggest that relationships make up for increasingly strong negative encounters, providing a level of insulation for the marketer. Implications for service firms are discussed.