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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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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).

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.

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.

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.

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.

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.

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

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).

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.

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.

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.

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

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.

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.

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

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.

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

The purpose of this study is to contribute to previous research on customer relationships by quantitatively examining differences in the monetary benefits obtained by consumers using social and commercial relationships to make purchases from small and medium-sized enterprises (SMEs).

Customer transaction and relationship data from an SME in the USA is used to quantitatively assess the value of different marketplace relationships in an entrepreneurial context. Tobit regression is used to empirically model and test the impact of specific relationship characteristics on customer discounts.

Customers using social connections to make purchases obtain significantly larger discounts than customers using commercial connections; customers using direct connections attain significantly larger discounts than consumers using indirect connections (referrals). Interestingly, when examined by connection type, direct and indirect connections do not produce significant differences for social connections, yet they yield notable differences for commercial connections. The findings provide valuable insights to entrepreneurs for understanding and managing customer relationships.

This study empirically demonstrates that social relationships can be both prevalent and influential in the marketplace. The methodology used to quantitatively assess the monetary value associated with different methods of engaging with SMEs allows objective comparisons among different types of customer relationships. Quantification also allows important relationship characteristics to be empirically examined, including how the relationships compare to one another and to nonpersonal marketing activities. Ultimately, these novel contributions generate important insights to help marketers and entrepreneurs better understand customer relationships.