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Managing Customer Relationships for Profit: The Dynamics of Relationship Quality

Kaj Storbacka (The Swedish School of Economics and Business Administration, Helsinki, Finland.)
Tore Strandvik (The Swedish School of Economics and Business Administration, Helsinki, Finland.)
Christian Grönroos (The Swedish School of Economics and Business Administration, Helsinki, Finland.)

International Journal of Service Industry Management

ISSN: 0956-4233

Article publication date: 1 December 1994

34195

Abstract

Addresses customer‐relationship economic issues, more specifically the link between service quality and profitability from a relationship marketing and management perspective. In this perspective the task of marketing is not only to establish customer relationships, but also to maintain and enhance them in order to improve customer profitability. In the service quality literature higher quality is assumed to lead to customer satisfaction, which leads to customer loyalty and this drives customer profitability. The framework highlights factors that, in addition to service quality and customer satisfaction, influence the links between service quality and profitability. Also discusses aspects of improving the profitability of relationships, such as enhancing relationship revenues through higher degrees of patronage concentration, and reducing relationship cost by changing the episode configuration of customer relationships.

Keywords

Citation

Storbacka, K., Strandvik, T. and Grönroos, C. (1994), "Managing Customer Relationships for Profit: The Dynamics of Relationship Quality", International Journal of Service Industry Management, Vol. 5 No. 5, pp. 21-38. https://doi.org/10.1108/09564239410074358

Publisher

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MCB UP Ltd

Copyright © 1994, MCB UP Limited

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