Marketing Models of Service and Relationships

Given the growth of the service sector, and advances in information technology and communications that facilitate the management of relationships with customers, models of service and relationships are a fast-growing area of marketing science. This article summarizes existing work in this area and identifies promising topics for future research. Models of service and relationships can help managers manage service more efficiently, customize service more effectively, manage customer satisfaction and relationships, and model the financial impact of those customer relationships. Models for managing service have often emphasized analytical approaches to pricing, but emerging issues such as the tradeoff between privacy and customization are attracting increasing attention. The tradeoffs between productivity and customization have also been addressed by both analytical and empirical models, but future research in the area of service customization will likely place increased emphasis on e-service and truly personalized interactions. Relationship models will focus less on models of customer expectations and length of relationship, and more on modeling the effects of dynamic marketing interventions with individual customers. The nature of service relationships increasingly leads to financial impact being assessed within customer and across product, rather than the traditional reverse, suggesting the increasing importance of analyzing customer lifetime value and managing the firm’s customer equity.