Relationship marketing : complex customer relationships in project-based markets

The construction industry has high levels of conflict and low rates of customer satisfaction. Relationship marketing is an organisational approach that improves cooperation and customer satisfaction. Yet relationship marketing theory has been developed for traditional service industries, such as banking and hospitality, where firms benefit from customer retention. In contrast, construction firms operate within project-based markets where the need to retain customers is of less value and importance to the business. Furthermore, the nature of the ‘customer relationship’ within these markets comprises of several characteristics that make them complex. Within this context, this thesis investigates the transfer of relationship marketing to project-based markets which are characterised by these complex customer relationships. This research uses an explanatory sequential mixed-methods approach. Phase One comprised of an online survey, which was sent to 4,928 Australian construction firms. A total of 175 completed responses were received. Phase Two used semi-structured interviews, which were conducted with 19 Australian construction firms. The survey results reveal that although construction firms have a relationship marketing orientation, most rarely engage in traditional relationship marketing activities. Furthermore, with respect to the nature of their customer relationships, eight of the nine characteristics were found to be present in this market. The interview findings demonstrate an evolving relationship focus, whereby construction firms balance the legal and social objectives of their customer relationships over time. In addition, the interview phase found that Australian construction firms place greater emphasis on customer referrals rather than repeat purchase intention. In general, the complex nature of the customer relationships makes the transfer of relationship marketing theory into project-based markets difficult to implement. This thesis contributes to relationship marketing research by exploring the complexity of the customer relationships in project-based markets and investigating how these relationships impact the extent to which this approach can be applied to the Australian construction industry. The implications for practice are that managers of project-based firms can adapt their relationship marketing to increase trust throughout project-delivery, and to focus on customer referrals rather than customer retention to maximise the benefits of adopting a relationship marketing approach.