I Prefer a Multiplex Relationship

"It is increasingly common for suppliers in B2B settings to build multiple types of ties with their customers," a group of researchers recently noted in the Journal of Marketing. They cite as an example Brocade Communications, which in 2002 set up a marketing alliance and a joint venture with Hewlett-Packard, in addition to selling servers and providing R&D to HP.

By establishing multiple ties like these, suppliers can learn details about a client to help improve their products and services, the researchers note. But how complex should such ties be?

The researchers sought to find that answer by investigating the effect of "relationship multiplexity"—a "portfolio of diverse ties" between a supplier and a customer—on the supplier's performance with that customer.

They analyzed data from filings at the Securities and Exchange Commission and reached some conclusions. Among them:

• Relationship multiplexity with a customer is a valuable "market-based asset" that "increases a supplier's sales to a customer and reduces the volatility of sales to a customer."
• By forming multiplex ties with a customer, a supplier can collaborate with the customer to co-develop offerings that meet the customer's unique requirements, thus "providing an economic incentive for the customer to buy more."
• The economic incentives engendered by a multiplex relationship are of greater value to a customer "when it is in a more competitive industry."

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