Make or Break?: The Micro-Foundations of Consumer - Brand Relationship Development in Crisis

Consumer-brand relationships (CBRs) evolve and adapt over time in reaction to psychological, social, and marketplace factors. Within this development, it is likely the relationship will, at some point, experience turbulence. One possible source of turbulence is an external crisis; a major negative event which acts on both the firm and their customers. The way in which a brand deals with such a crisis can determine whether the relationship recovers or terminates. However, extant literature is yet to investigate external crises from a long term, dynamic, relational perspective. Therefore, this study seeks to understand, first, how a CBR develops under crisis conditions, second, what potential microfoundational factors of change (MFCs) affect the relationship development, and third, what underlying process can explain these effects (e.g., communal vs exchange relationship norms).

To investigate these phenomena, a panel survey was administered to 192 university student respondents asking about their relationship with their university brand at a time when an external crisis was acting on the university student relationship (i.e., Covid-19). The survey was administered 5 times over 15 months. The results were then analysed using latent growth modelling (LGM) techniques to model the change, not only in the CBR, but also in the factors affecting the relationship, to provide a truly dynamic investigation of the relationship in crisis.

The study finds, firstly, that the cognitive, affective, and behavioural dimensions are the CBR behave differentially over time. Specifically, that cognitive dimensions decline initially but are then able to repair over time, that affective dimensions level off over time and that behavioural dimensions continue to decline. Second, it is shown that varying salience over time of the relationship norms that govern a relationship play an important role in its development. Specifically, levels of communality decrease over time in crisis and levels of exchange increase. However, only the decreasing level of communality significantly affects the change in the CBR. Implying that a long term relationship is governed primarily by salience of communal norms. Thirdly, a number of MFCs are identified which affect the development of a relationship. That is, changes in both the social exchange and relational conflict MFCs prove to be significant antecedents of communality (but not exchange) and the CBR. However, only one MFC, customer investment, is found to significantly affect the repair of a relationship. Therefore implying that although social exchange and relational conflict MFCs are useful predictors of relationship development, only customer investment explains why the relationships begins to repair even when the crisis is still ongoing.