Hirschman (1970) described two responses available to a member of a declining organization, exit and voice, with loyalty conditioning which one gets used. Rusbult et al. (1982) added a fourth response the original pair had left out, neglect, meaning the passive allowance of deterioration, in which a party stays in the relationship while quietly withdrawing effort from it. Ping (1993) carried the whole typology into marketing channels and tested it on retailers in a wholesale relationship, where the structure held, and Ping (1999) later reported that exiting carries antecedents beyond satisfaction and the cost of leaving, specifically loyal behavior, voice, and relationship neglect. Taken together, this line of work suggests that a manufacturer watching its channel for exit is watching for the less likely response, since exit announces itself and neglect does not.
Reallocation as the form neglect takes
In industrial distribution, neglect takes the form of reallocation. A competing part number is listed first on a quote, inventory trimmed after a slow quarter is never restored, and a training class cancelled for low enrollment is never rescheduled. Inside salespeople offer by default the line whose pricing is already loaded in their system, applications specialists solve problems with whichever product’s support responds fastest, and a branch manager who waited on a slow credit decision stocks the line one unit deep. Each decision is locally rational, none would be recognized as a breach under a distributor agreement, and the aggregate is a line that remains authorized while it gradually ceases to be sold.
The brand’s share of the drift
The brand contributes to the same drift from its side of the relationship. New distributors are appointed without notice, factory leads are routed to competitors, cooperative marketing dollars migrate, and national account carve-outs remove the volume that justified local inventory. The commitment and trust literature, running from Anderson and Narus (1990) through Morgan and Hunt (1994), treats these relationships as investments that compound or decay over time, and Hibbard et al. (2001), studying supplier acts that reconfigure a channel, found dealer responses conditioned by the quality of the relationship that preceded the act. Manifested agency loss, in the sense Bendickson et al. (2016) give the agency problem, results from the defection of one or more channel groups, and defection by neglect is the form of it least likely to be seen by the principal.
A temporal asymmetry
A difference in time horizons compounds the problem. One participant in Tolbert (2022) observed that “the factory direct replication is 3 months to 2 years in measured time, whereas independent reps and distributors measure tenure in decades.” Brand-side leaders seldom remain in place long enough to see their appointment strategy evaluated, which leaves each relationship path-dependent on decisions whose authors have moved on, and the people present at a review were rarely present at the appointment.
The fossilized line
The most dangerous condition is the fossilized line, which Tolbert (2022) describes as “the line whose sales are acceptable and have not moved in years, where the same 15 or 20 end users reorder because the product is already in their plants and nothing new has been specified in a long while.” Such a line appears healthy on a revenue report and usually in a satisfaction survey as well, although it functions as an annuity against an installed base that decays at the replacement rate, and the brand is experiencing order taking in place of selling.
What the survey misses
Jones and Sasser (1995) had reported, before the recommendation metric existed, that satisfied customers defect at rates their satisfaction scores give no warning of. Keiningham et al. (2007) later tested the growth claim for the net promoter score in the industries Reichheld had cited as exemplars and failed to replicate its superiority over established satisfaction measures, and Bendle et al. (2019) revisited the episode as a study in what happens when a practitioner metric outruns its evidence. The typical channel survey nonetheless remains the single recommendation question that Reichheld (2003) popularized, run annually and reported as one number. In an exploratory study of one manufacturer’s distributors, conducted by the present author and currently under review, pricing and ease of doing business scored net negative while the recommendation question scored positive, from the same respondents in the same administration, so that a composite score would have described the relationship as healthy. That ease of doing business was simultaneously the weakest score and among the strongest drivers is consistent with Dixon et al. (2010), who reported on the customer side that reducing the effort required to transact predicted loyalty better than attempts to exceed expectations.
In finality
A measurement approach suited to neglect would examine the composition of the accounts behind a line, including their age, their concentration, and the direction both are moving. It would separate the perspectives of owners, outside sales, inside sales, and applications staff, who frequently diverge on the same brand, and report each dimension on its own. It would be administered independently of the brand under evaluation, since a brand-administered survey invites diplomacy from respondents who depend on the brand, and it would be repeated over time, because a single reading cannot distinguish a low score from a falling one.
The full argument is in the guide on why distributors stop selling your line. The Channel Health Index was built around this specification.
References
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