Customer Relationship Development in Hedonic and Utilitarian Services

Abstract

It is widely accepted that customer relationships are important to the profitability of a company. Especially, customer relationship development drivers such as customer loyalty, word of mouth, share of wallet and duration of the relationship are critical factors in increasing profitability and creating long-term relationships between the organization and the customer (e.g. Garbarino & Johnson, 1999). In the service based context, those variables act as the crucial glue in developing relationships, because of the service intangibility and complexity (Day, 1999). It has been recognised that the nature of customer relationship variables are polymorphous and is influenced by the nature of services. However, the moderating effect of the type of service on customer relationships has not been clearly addressed by academic research. This paper is going to examine the link between customers’ attitudes and behaviours based on the moderating effect of hedonic and utilitarian services. It has been argued that the hedonic-utilitarian dichotomy is one the most important dichotomies in services marketing (e.g. Jones, Reynolds & Arnold, 2006). Propositions from the Theory of Planned Behaviour (TPB) are used as a theoretical platform to examine intentions to repurchase from the same service provider. The paper tries to address some of the criticisms of the TPB and to extend it in the context of services marketing and customer relationships. As the service contexts are heterogeneous in different ways the paper examines how variations of services on the hedonic and utilitarian dimension alter some of the theoretical propositions.