Impact of participative service relationships on quality, satisfaction and retention: An exploratory study

Within any service there is scope for considerable variation in the degrees to which both parties become involved in the relationship; beyond a certain minimum level, customers and service providers may be more or less participative. However, participative behavior should field benefits. Customers who are more willing to share information and develop closer personal contacts might be expected to benefit in terms of a higher quality of service provision, because the provider will be more knowledgeable about their needs and expectations. Similarly, greater degrees of participation the service provider should enhance customer awareness of the ways in Ir which the supplier operates ann, in turn, should result in more realistic expectations of what the supplier can offer. Thus, it can be argued that the extent to which both pal ties participate in a relationship will affect the perceived quality ol the service provided; this, in turn, is expected to make an impact on overall satisfaction and customer retention. This paper presents an exploratory analysis of the relationships between relationship participation, quality, satisfaction, and I retention using data from over 1,200 small firms. The results highlight the importance of participative behavior, particularly or the part of the service provider, in explaining perceived quality and satisfaction; in turn, satisfaction is found to be an important influence on retention. The direct impact of participation on retention is found to be weak. (C) 1999 Elsevier Science Inc. All rights reserved.