Relationship Marketing Strategies and Customer Retention in Service Organizations

Service companies today are striving to improve customer relationships, not only to enhance the relationship experience but also to achieve long-term retention that is crucial for survival in a competitive environment. Due to the changing nature of service markets towards customer- oriented service models, it is crucial to develop insights in behavioral and relational drivers of customer retention. The purpose of this study is to investigate the influence of five important relational constructs, relationship quality (RQ), customer trust (CT), customer commitment (CC), communication effectiveness (CE), and service personalization (SP) on customer retention (CR) in service firms. A questionnaire was formulated using existing measurement scales and distributed to a targeted 380 end users in the context of service industry which includes telecommunication, banking, hotel and healthcare services. In sum, 207 questionnaires were retained and 19 were excluded due to missing values, yielding a final data set with respect to the sample size n = 188. The proposed hypotheses were tested through correlation and regression analyses at 5% level of significance, using SPSS version 26. The results based on empirical analysis show that all five relationship marketing strategies have both positive and significant effect to customer retention and relational qualities along with customer commitment are the most influential predictor that led to greater level of customer retention. The present study makes theoretical contributions to the relationship marketing literature and managerial implications for service companies seeking to develop retention-based strategies, and sustainable relationships with customers.