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Article
Publication date: 26 August 2014

Kristina Heinonen

The purpose of this paper is to describe and conceptualize customer relationships in the financial service sector, focussing on three aspects of customer-bank relationships

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4663

Abstract

Purpose

The purpose of this paper is to describe and conceptualize customer relationships in the financial service sector, focussing on three aspects of customer-bank relationships: the financial service provider perspective, the customer-provider dyad, and the customer context.

Design/methodology/approach

Through a short review of the eight papers included in this special issue, this paper illustrates different aspects of customer relationships. It explores customer value formation in the context of banking services, the dynamics and strength of customer relationships, and strategies for financial service provision and consumer trust.

Findings

Customer relationships in the financial service sector are increasingly dynamic and unpredictable. This may be due to both activities within the control of financial service providers, such as strategies for service provision, but is more often attributable to factors beyond the control of providers. What empowered customers are doing in their own settings influences their attitudes toward and evaluations of financial services.

Research limitations/implications

The paper is conceptual. It challenges the firm-centric approach to customer relationships and compares different perspectives of customer relationships. The significance of the customer-centric perspective is emphasized.

Practical implications

Awareness of uncontrollable and idiosyncratic aspects of customer relationships will offer financial service providers new opportunities for being present in the customers’ lives and business.

Originality/value

This paper illustrates the importance of extending the focus from what financial service providers are doing to what customers are doing within their own domains. Financial service providers need to understand more about their customers than their perceptions of service quality, satisfaction, and loyalty in different distribution channels, such as internet and mobile banking. The focus should be instead on how customers integrate their financial activities and experiences in their own life or business.

Details

International Journal of Bank Marketing, vol. 32 no. 6
Type: Research Article
ISSN: 0265-2323

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Book part
Publication date: 1 November 2008

Thomas Ritter and Achim Walter

Managers and academics alike focus on value creation in business relationships. This paper adds to existing literature by analyzing functions of business relationships and…

Abstract

Managers and academics alike focus on value creation in business relationships. This paper adds to existing literature by analyzing functions of business relationships and their impact on value perception. Applying a customer perspective, direct relationship functions are concerned about payment, quality, and volume. Indirect functions include innovation, access, and scouting. Furthermore, trust and number of alternative suppliers are included in the study. The empirical results illustrate the important role of direct and indirect functions for value creation. Understanding these functions is instrumental for driving customer value, both for the supplier and the seller. Direct functions do have a much stronger impact on value than indirect functions that still do have a significant impact. Thus, increasing direct function fulfillment is much more effective in order to gain key supplier status than relying only on indirect functions. But indirect functions may offer ample differentiation opportunities. Being a strong driver of relationship value, trust is also driven by function fulfillment. Thus, relationship value depends on rational elements (functions) and social elements (trust). Availability of alternative suppliers increases the importance of relationship function fulfillment on customer value and customer trust. In highly competitive markets, suppliers need clear understanding and communication of relationship value in order to succeed.

Details

Creating and managing superior customer value
Type: Book
ISBN: 978-1-84855-173-2

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Article
Publication date: 1 October 2002

Lawrence A. Crosby

How can popular misconceptions about the nature of customer relationship marketing/management limit the effectiveness of this approach? How are companies misled by an…

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12802

Abstract

How can popular misconceptions about the nature of customer relationship marketing/management limit the effectiveness of this approach? How are companies misled by an over‐reliance on technology, lack of strategic perspective, use of faulty metrics, inadequate segmentation, neglect of brand considerations, blind faith in data, and confusion regarding leadership roles? This article challenges the misconceptions and provides guidance on how to successfully execute a customer relationship strategy.

Details

Managing Service Quality: An International Journal, vol. 12 no. 5
Type: Research Article
ISSN: 0960-4529

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Article
Publication date: 8 August 2016

Adrian Palmer and David Bejou

This paper aims to reflect on the paper “Service failure and loyalty: an exploratory empirical study of airline customers” published 18 years ago. It positions it in the…

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2760

Abstract

Purpose

This paper aims to reflect on the paper “Service failure and loyalty: an exploratory empirical study of airline customers” published 18 years ago. It positions it in the evolving literature on relationship marketing and suggests directions for further research and developments in the area.

Design/methodology/approach

A review of key contributions of the paper to the study of relationship marketing and the effects of service failures on relationships identifies emerging strands of research.

Findings

The concept of a “relationship lifecycle” is now widely used in marketing for identifying customer segments. Different points in the lifecycle are associated with differing sets of relationship expectations and levels of tolerance to service failure. Customer relationship management has tended to morph into customer experience management where principles of relationship lifecycles have been applied to mapping customer “journeys” through a service process.

Practical implications

The original study informed practices of managing relationship expectations and handling failed expectations, depending on a customer’s length of relationship with a company. Although relationship marketing was originally conceived as an integrator of marketing cues, its emphasis on cognitive evaluations may have been too limiting and customer experience management has since introduced additional affective dimensions.

Originality/value

The original paper had been widely cited and generated discussion and important further research. It has value as part of the emerging landscape of services marketing research. This retrospective analysis locates this historical development with reference to currently popular issues of customer experience management.

Details

Journal of Services Marketing, vol. 30 no. 5
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 12 July 2018

Carol J. Gaumer and Kathie J. Shaffer

The purpose of this study is to examine what happens to human relationships when a family business is handed off to the next generation. The second generation, to succeed…

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782

Abstract

Purpose

The purpose of this study is to examine what happens to human relationships when a family business is handed off to the next generation. The second generation, to succeed, must work to nurture and sustain current customer, supplier, and employee relationships so as not to damage existing goodwill. As power is transferred from the founder of the family business to the next generation, organizational issues and the leadership style of the successor take center stage.

Design/methodology/approach

This is strictly a conceptual paper designed for the practitioner. There is no empirical study therein, only theoretical frameworks to guide practitioners and family business owners. It is meant to be informational with many useful “tips” for family business succession.

Findings

Relationships with valuable human resources, such as current customers, suppliers, and employees must receive the attention they deserve to avoid negatively impacting organizational brand equity. Failure to nurture supplier relationships can increase costs and access. Neglected customer relationships may cause the loss of key members of these groups, contributing significantly to second-generation business failures. Damaged employee relationships cause expensive turnover, loss in customers, and negative word of mouth. Research suggests that only 30 per cent of businesses survive into the second generation and even less (about 13 per cent) into the third generation (U.S. Census Bureau, 2015).

Research limitations/implications

The next step would be to test the propositions using both qualitative and quantitative research, beginning with interviews of second-generation family business owners. The interviews would test the successor-generations’ attitudes and behaviors toward established customers, suppliers, and employees. Attitudes would be measured on a Likert scale to explore the perceived importance of current customers, employees, and suppliers to the new owner. Issues of commitment, responsibility, loyalty, friendship, respect, and caring would also be measured to evaluate how relationship-friendly the new owner is. Levels of retention of key stakeholders would then be correlated with the firm’s financial success or failure to see if there is any statistically significant relationship.

Practical implications

Establishing and maintaining strong trust relationships will socially bond customers, employees, and suppliers to the organization. Introduction of a second generation changes the dynamics of these relationships, so care is critical, as customers, suppliers, and employees become anxious with change. Relationship management is about nurturing customer relationships, honoring supplier arrangements, and developing employees. Consistent care toward trusted human resources creates brand equity (or monetary value). Naturally, family businesses start small and understand the value of each relationship, but as the business passes from the founder to the second generation, these loyal, trusted relationships may be tested. It is up to the successor to assure customers, suppliers, and employees that they are a valued part of the operation. Inability to do this will likely lead to an erosion of the business’ loyal base and may precipitate in failure of the firm for the successor.

Social implications

The social implications revolve around acceptable human interaction and proper treatment of individuals who are critical to the small family business’ success. As a family business passes from the founder to the second generation, loyal, trusted relationships may be tested. It is up to the successor to assure customers, suppliers, and employees that they are a valued part of the operation. Inability to do this will likely lead to an erosion of the business’ loyal base and may precipitate in failure of the firm for the successor.

Originality/value

It is original in that it is practitioner-oriented and full of useful tips for the family business owner. None of the information contained therein is novel. It is a consensus or compilation of useful information packaged for a practitioner.

Details

Human Resource Management International Digest, vol. 26 no. 6
Type: Research Article
ISSN: 0967-0734

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Article
Publication date: 1 July 1998

David Bejou, Christine T. Ennew and Adrian Palmer

The development of effective customer relationships is increasingly recognised as an important component of marketing strategies, particularly in the case of service…

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9030

Abstract

The development of effective customer relationships is increasingly recognised as an important component of marketing strategies, particularly in the case of service industries. Developing and maintaining satisfactory customer relationships can help to reduce perceived risk, reduce transactions costs, increase customer loyalty and customer retention and thus impact on organisational performance. From the customer’s perspective, the determinants of relationship satisfaction are thought to include factors such as customer orientation, trust, length of relationship, expertise and ethics. Provides further evidence on the cognitive antecedents of relationship satisfaction based on evidence from the financial services sector.

Details

International Journal of Bank Marketing, vol. 16 no. 4
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 13 February 2007

Nelson Oly Ndubisi

To examine the impact of relationship marketing strategy on customer loyalty.

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46321

Abstract

Purpose

To examine the impact of relationship marketing strategy on customer loyalty.

Design/methodology/approach

A questionnaire derived from previous studies and the relevant literature was completed by 220 bank customers in Malaysia. Multiple regression analysis assessed the impact on customer loyalty of four key constructs of relationship marketing (trust, commitment, communication and conflict handling).

Findings

The four variables have a significant effect and predict a good proportion of the variance in customer loyalty. Moreover, they are significantly related to one another.

Research limitations/implications

The relationships investigated in this study deserve further research. Because the data analysed were collected from one sector of the service industry in one country, more studies are required before general conclusions can be drawn.

Practical implications

It is reasonable to conclude, on this evidence, that customer loyalty can be created, reinforced and retained by marketing plans aimed at building trust, demonstrating commitment to service, communicating with customers in a timely, reliable and proactive fashion, and handling conflict efficiently.

Originality/value

Reinforces and refines the body of knowledge relating to customer loyalty in service industries.

Details

Marketing Intelligence & Planning, vol. 25 no. 1
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 1 April 2001

Satya P. Chattopadhyay

Retention of existing customers is a priority for businesses to survive and prosper. The high cost of acquisition of new customers in a mature market has pushed…

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3094

Abstract

Retention of existing customers is a priority for businesses to survive and prosper. The high cost of acquisition of new customers in a mature market has pushed organizations into actively seeking to build and sustain long‐term relationships with customers. Such relationships are strong enough to provide a substantial barrier to switching business over to competition in most cases. The transition of a neutral or negative relationship into positive territory is based on changes in one or more of the cognitive, affective and behavioral dimensions of the relationship. Information exchanges between an organization and its customers play a significant role in such a change. The nature and scope of relationship with a customer changes, as the customer needs evolve in the course of the product life cycle in the customer’s industry. A framework merging the concepts of “customer relationship management” and “product life cycle” into “customer relationship life cycle” is proposed.

Details

Marketing Intelligence & Planning, vol. 19 no. 2
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 17 October 2008

Sally Harridge‐March

The purpose of this paper is to discuss the complementary effect of relationship marketing and direct marketing and outline the foundations of direct marketing that can be…

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11310

Abstract

Purpose

The purpose of this paper is to discuss the complementary effect of relationship marketing and direct marketing and outline the foundations of direct marketing that can be enhanced by relationship marketing principles.

Design/methodology/approach

This is a personal viewpoint based on many years of working in, teaching and research of direct and relationship marketing.

Findings

The paper finds that both disciplines of direct marketing and relationship marketing have something of value to the other. The combination of the two strategies can only be of value and benefit to both customers and organisations.

Originality/value

The value of this paper is that it outlines the symbiotic strength of direct marketing and relationship marketing that allows contemporary marketers to utilise the best of both disciplines to establish and maintain strong relationships with their customers

Details

Direct Marketing: An International Journal, vol. 2 no. 4
Type: Research Article
ISSN: 1750-5933

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Article
Publication date: 4 October 2021

Dorian Laurentiu Florea, Cătălin Mihail Barbu and Claudia Cristina Rotea

Drawing on signaling theory, this paper aims to argue in favor of a “placebo outsourcing effect” (POE) consisting of a positive relationship between provider’s bluffing…

Abstract

Purpose

Drawing on signaling theory, this paper aims to argue in favor of a “placebo outsourcing effect” (POE) consisting of a positive relationship between provider’s bluffing and customer satisfaction.

Design/methodology/approach

The authors applied prediction-oriented segmentation SEM on a dyadic sample of 171 outsourcing relationships.

Findings

The authors highlighted two segments that display a form of POE, representing about three-quarters of the customer-provider dyads. The first segment exhibits a positive relationship between the provider’s bluffing and customer satisfaction that is further strengthened by the provider’s reputation and customer’s operational capabilities, while for the other segment, the provider’s bluffing has positive interactions with both operational capabilities and outsourcing experience. These findings show that service providers have reached the bluffing proficiency that enables them to bluff customer firms with varying levels of operational capabilities and outsourcing experience by using the most appealing signals for every type of customer.

Practical implications

Based on the findings, the authors provided to customer firms extensive guidelines to avoid the POE by frustrating service provider’s bluffing proficiency.

Originality/value

This study’s originality resides in the amendment of the disconfirmation paradigm of satisfaction in the outsourcing context by introducing and testing the POE.

Details

Journal of Business & Industrial Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0885-8624

Keywords

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