Building customer capital through relationship marketing activities. The case of Taiwanese multilevel marketing companies
| DOI | https://doi.org/10.1108/14691930510592834 |
| Date | 01 June 2005 |
| Published date | 01 June 2005 |
| Pages | 253-266 |
| Author | Aihwa Chang,Chiung‐Ni Tseng |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Building customer capital through
relationship marketing activities
The case of Taiwanese multilevel marketing
companies
Aihwa Chang
Department of Business Administration, National Chengchi University, Taipei,
Taiwan, ROC, and
Chiung-Ni Tseng
InterVideo Inc., Taipei, Taiwan, ROC
Abstract
Purpose – To provide a theoretic framework of the development of customer capital and an
empirical verification using Taiwanese multilevel firms.
Design/methodology/approach – The authors used survey research to collect data from members
of four Taiwanese multilevel companies. They explored the mediating roles of the drivers of customer
equity in the “relationship marketing activities-customer capita” effect. A total of 306 valid responses
were analyzed using structural equation modeling analysis.
Findings – Four types of relationship marketing activities – core service performances, recognition
for contributions, dissemination of organization knowledge, and member interdependence
enhancement – have significant influences on relationship equity. Relationship equity in turn
affects customer capital. Value equity and brand equity respectively have significant effects on
customer acquisition and customer retention. Customer acquisition has a significant “feedback” effect
on value equity, and relationship equity affects brand equity positively.
Research limitations/implications – The generalizability of this research is constrained due to a
non-probability sample of firms being used to verify the theoretic framework. It is also constrained due
to the fact that only customer-side data were collected and proxy measures of customer capital were
used.
Practical implications – Effective and ineffective types of relationship marketing activities have
been identified. The causal paths between relationship marketing and customer capital have been
illustrated.
Originality/value – This paper sheds light on the approach to building customer capital for
membership-emphasized organization.
Keywords Customers, Relationship marketing, Equitycapital, Multilevel marketing, Taiwan
Paper type Research paper
Introduction
Customer capital, an important component of intellectual capital, has been regarded as
a major source of competitive advantage in the “knowledge economy” (Stewart, 1997;
Edvinsson and Malone, 1997; Bontis et al., 1999). Customer capital is the value – the
contribution to current and future revenues – that results from an organizati on’s
relationship with the customers (Bontis, 1996; Duffy, 2000). Therefore, establishing a
profitable lifetime relationship with customers has been the focus of smart twenty-fir st
century organizations.
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/1469-1930.htm
Building
customer capital
253
Journal of Intellectual Capital
Vol. 6 No. 2, 2005
pp. 253-266
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930510592834
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