EXPRESS: Effects of Revolving Door Directors on Customer Relationship Performance in Business-to-Government Markets

Firms in business-to-government (B2G) marketplaces often invite former government officials to join their boards of directors, in search of their critical government connections and knowledge. However, the marketing implications of these revolving door directors are unclear. By analyzing multisource, secondary panel data of 1,731 publicly traded U.S. firms in the B2G market between 2005 and 2021, the authors find that revolving door directors exert significantly positive effects on three dimensions of customer relationship performance: customer acquisition, customer retention, and cross-selling performance. Their government connections and expertise both mediate the effects of revolving door directors on acquisition performance, whereas only government connections mediate the effects on retention and cross-selling performance. The beneficial effects of revolving door directors are contingent on the competitive pressure a firm faces when serving government customers. Specifically, customers’ competitive procurement preference (customer-initiated competition) and exposure to bid protests (competitor-initiated competition) together create procurement uncertainty for sellers in B2G markets, such that revolving door directors are less effective at improving customer relationship performance when customers prefer competitive procurement processes, but more effective when those customers face greater exposure to bid protests.