Abstract
The rapid growth of the services sector has brought pressure for change in marketing practices. Intense competition within many service industries means that successful companies need to fully understand customer needs and ensure services are designed and delivered to match them. The services sector is now embracing relationship marketing and its principles. In particular, service companies are now vitally concerned with retaining their existing customer base. This chapter addresses the importance of customer retention and relationship marketing in services companies and uses a case study from the utilities industry to illustrate the importance of understanding how customer retention can affect profitability within different segments. The authors start by describing the market conditions within the utilities industry in the UK. They then discuss the concepts of relationship marketing and customer retention and their importance to this newly deregulated market. Next, they introduce a model for understanding customer retention economics and use data from a UK electricity company to highlight the importance of undertaking rigorous segmentation and understanding how customer retention can affect profitability within different segments. Finally, they discuss implications for the service sector.
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Payne, A., Frow, P. (2000). Services Relationship Marketing: A Sector Case Study. In: Hennig-Thurau, T., Hansen, U. (eds) Relationship Marketing. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-09745-8_17
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DOI: https://doi.org/10.1007/978-3-662-09745-8_17
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