Expression of personalization while developing long-term relationships with service customers

Abstract

Efforts directed towards customer retention highly depend on the area in which company operates. Personalization is considered as one of the most effective means for service companies to develop long-term relationships with their customers. However, it still remains unclear how personalization should be expressed while developing long-term relationships with service customers. Thus, the aim of this study is to reason theoretically the effect of personalization on long-term relationships with service customers and to test it empirically on the example of high personal contact services. Theoretical studies reveal that personalized interaction between a service customer and a company is a three-dimensional construct, dimensions of which are personalized contact, personalized physical environment, and customer environment. Results of personalization in the context of the long-term relationships development are expressed through relationship quality (trust, satisfaction, and commitment) and customer loyalty (loyalty to a service company and loyalty to a certain employee). Hair salon services were chosen as a case for the empirical research. Results of the empirical research show that dimensions of personalized interaction influence both relationship quality dimensions and relationship results. The most significant dimension of personalized interaction while developing long-term relationships with customers of hair salons is personalized contact. The paper gives some practical insights for the development of long-term relationships with customers of hair salons.