K. Eriksson et Al. Vaghult, Customer retention, purchasing behavior and relationship substance in professional services, IND MKT MAN, 29(4), 2000, pp. 363-372
Customer retention is central to the development of business relationships.
However, customer retention is specific to the context of each firm, and t
his is rarely recognized in models for customer retention. This paper studi
es how customer retention depends on the relationship substance may be of a
more or less embedded kind, which is explored here in the form of relation
ship satisfaction and organizational change in the buying firm. The concept
ual model is tested on a sample of business relationships in professional s
ervices. The results support the fundamental effect that relationship satis
faction improves customer retention. The article also finds that the purcha
se development of customers increases customer retention, in particular if
the customer who purchases more is also satisfied. However,when the selling
firm has achieved change in the customer firm, customer retention is reduc
ed. Evidently, these customers consider that they are done with the seller
and move the other seller, or reduce their purchases altogether. This can b
e mitigated if the seller uncovers new areas for business, or involves valu
e adding partners. (C) 2000 Elsevier Science Inc. All rights reserved.