Marketing

Quantum mechanics

Scale (ratio)

Project portfolio management

Portfolio

Economics

Computer science

Typology

Anthropology

Modern portfolio theory

Business

Application portfolio management

Physics

Management

Position (finance)

Value (mathematics)

Customer relationship management

Sociology

Project management

Industrial organization

Finance

Machine learning

Journal of Marketing

Management of an entire portfolio of customers who are at different relationship stages requires a dynamic theory of exchange relationships that captures the trade-offs between scale economies and lifetime customer value. This article contributes to the understanding of relationship management by developing a typology of exchange relationship mechanisms and a model of relationship dynamics and by simulating the model to provide guidelines for customer portfolio management. An important insight from the research is that a key to the creation of value through closer relationships lies in bringing weaker relationships into a portfolio in the first place. Another insight is that firms that position themselves toward offerings with low economies of scale, such as personal services, must build closer relationships to create value.

Customer Portfolio Management: Toward a Dynamic Theory of Exchange Relationships