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The Nature of Customer Relationships in Services

Customer relationships in services have been insufficiently studied compared to service interactions. In this paper findings from research on relationships within industrial marketing are applied to consumer services. To manage customer relationships new concepts are needed in addition to those used in static service quality models. A conceptual framework is presented where perceived service quality and customer satisfaction are related to relationship characteristics. It is suggested that the nature of the relationship is determined by the commitment of both the customer and the service provider to the relationship and by the bonds that exist between them. BACKGROUND It has been argued that long lasting relations with customers would be beneficial for a service company. Relationship marketing has emerged as a new important approach by which marketing management can achieve customer retention. Customer retention is assumed to depend critically on the quality of and satisfaction with the service. The role of separate interactions, episodes in relation to the perception of overall quality has, however, not been scrutinized. One reason for this is that the question arises only when a dynamic perspective is applied. Both service quality and satisfaction have traditionally been approached from a static perspective (Grönroos 1993a). Empirical studies often use cross-sectional surveys to measure the service quality at a certain point of time, although initial attempts have been made to make static service quality models dynamic (Boulding et al. 1993). Customer retention indicates customer loyalty or some kind of relationship between the customer and the firm. The relationship concept gives a quite different view of the exchange processes on the market compared to the static view. In the service quality literature there is currently a discussion on the interrelationship between quality, satisfaction and value (see e.g. Anderson and Fornell 1994; Oliver 1993; Parasuraman, Zeithaml and Berry 1994; Rust and Oliver 1994). In this paper we will present a dynamic service relationship quality model that clarifies the relation between these concepts. In the model a distinction is made between episode quality and relationship quality. Satisfaction, service quality and value may all be