Managing Customer Relationships for Profit: The Dynamics of Relationship Quality

Authors: Storbacka, Kaj; Strandvik, Tore; GrÃ·nroos, Christian

Source: International Journal of Service Industry Management, Volume 5, Number 5, 1994 , pp. 21-38(18)

Publisher: Emerald Group Publishing Limited

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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: Customer loyalty; Customer satisfaction; Marketing strategy; Pricing; Profitability; Relationship marketing; Service quality

Document Type: Research article

DOI: http://dx.doi.org/10.1108/09564239410074358

Publication date: 1994-12-01