Initial relationship development in new business ventures

• Published in: Industrial marketing management Vol. 42; no. 7; pp. 1025 - 1032
• Main Authors: La Rocca, Antonella, Ford, David, Snehota, Ivan
• Format: Journal Article
• Language: English
• Published: New York Elsevier Inc 01.10.2013; Elsevier Sequoia S.A
• Subjects: Business growth; Business-to-business; Customer relations; Customer relationships; Customers; Interaction; Marketing; Marketing function; New business ventures; Public relations; Small and medium sized enterprises; Startups; Studies; Customer relationships; Marketing function; Business-to-business; Interaction; New business ventures
• ISSN: 0019-8501; 1873-2062
• DOI: 10.1016/j.indmarman.2013.07.001

This paper seeks to investigate some of the issues faced by an existing company when developing the initial customer relationships for a new venture. All companies face the challenge of new-relationship development in order to achieve growth and to replace relationships which have been lost or are in decline. But the challenge of developing the first customer relationships of a new venture is likely to be particularly acute because the new venture's marketing function and its offering to customers are likely to be undefined and undeveloped. This paper is based on a case study of initial customer relationship development in a new venture of an established business. The paper analyses the issues that the company faced in developing these initial relationships and the approaches to relationship development that it took. The case analysis leads to the conclusion that the development of initial relationships can be facilitated by an ‘open marketing function’ involving a number of functional areas both in the supplier and in the initial customers. The paper draws managerial implications from the case analysis for the task of marketing in this situation. •The primary task facing management in a new venture is to develop its initial customer relationships.•Sales success for a new venture is the outcome of productive relationship development rather than the other way round.•A new venture's offerings are likely to be customer-specific and will be defined within its initial customer relationships.•The development of initial customer relationships can be facilitated by an ‘open marketing function’.•A major task for a new venture is to control and manage the effects of customer leadership of the venture.