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This paper aims to reflect on the paper “Service failure and loyalty: an exploratory empirical study of airline customers” published 18 years ago. It positions it in the evolving literature on relationship marketing and suggests directions for further research and developments in the area.

A review of key contributions of the paper to the study of relationship marketing and the effects of service failures on relationships identifies emerging strands of research.

The concept of a “relationship lifecycle” is now widely used in marketing for identifying customer segments. Different points in the lifecycle are associated with differing sets of relationship expectations and levels of tolerance to service failure. Customer relationship management has tended to morph into customer experience management where principles of relationship lifecycles have been applied to mapping customer “journeys” through a service process.

The original study informed practices of managing relationship expectations and handling failed expectations, depending on a customer’s length of relationship with a company. Although relationship marketing was originally conceived as an integrator of marketing cues, its emphasis on cognitive evaluations may have been too limiting and customer experience management has since introduced additional affective dimensions.

The original paper had been widely cited and generated discussion and important further research. It has value as part of the emerging landscape of services marketing research. This retrospective analysis locates this historical development with reference to currently popular issues of customer experience management.

There has been considerable analysis of buyer‐seller relationship development within the services sector. While a lot of attention has been given to the processes by which relationships are developed, the subject of relationship deterioration is less well researched. Examines the impacts of service failure on the quality of relationships between airlines and their customers who have suffered service failure. In particular, the effects on customers’ trust and commitment to the relationship are studied, the latter being assessed in terms of their willingness to recommend the airline they use to others. Reports on a study of airline customers in the south‐eastern USA which suggests that the impact of a given level of service failure is dependent on the duration to date of a customer’s relationship with the airline they use. However, a non‐linear correlation was found, suggesting that customers experience stages of being initially open‐minded about service failure, followed by lower tolerance of failure, which gradually gives way to a closer relationship which is more resistant to service failure

The development of effective customer relationships is increasingly recognised as an important component of marketing strategies, particularly in the case of service industries. Developing and maintaining satisfactory customer relationships can help to reduce perceived risk, reduce transactions costs, increase customer loyalty and customer retention and thus impact on organisational performance. From the customer’s perspective, the determinants of relationship satisfaction are thought to include factors such as customer orientation, trust, length of relationship, expertise and ethics. Provides further evidence on the cognitive antecedents of relationship satisfaction based on evidence from the financial services sector.

The advantage of relationship marketing strategies over discrete transactional activity is now widely recognized in banking and financial services markets. This has triggered research to identify the factors perceived by customers to be important in the development of ongoing relationships with front line staff. Sales personnel′s level of customer orientation, trust and ethical credibility has received much attention. Adds to previous research by analysing the role of gender in the development of buyer‐seller relationships. While there has been much research into gender differences in buyer behaviour on the one hand, and in sales effectiveness on the other, the combined effects of gender interaction have received little attention. Reports a survey of customers of financial advisers which compares dyads of gender‐defined buyer‐seller groups using constructs commonly found in both the relationship marketing and the social psychology literature. The results indicate that dyads do exhibit significant differences in terms of buyers′ perceptions of some aspects of relationship quality. However, the expected result that female sellers are perceived by buyers as showing more empathy and less selling orientation does not occur in a simple manner. The interaction with the gender of the buyer is important in determining perceptions of these aspects of relationship quality.

Conceptual arguments favouring a relational rather than a transactional approach to the study of buyer‐seller relationships are now well understood. However, attempts to quantify the factors contributing towards relationship quality have been held back by the complexity of the underlying factors and their interrelatedness. Traditional regression techniques are not effective in analysing data with high levels of multi‐collinearity and missing information, typical in many studies of buyer behaviour. Makes use of a relatively new technique – neural network analysis – to try to quantify the factors contributing to buyer‐seller relationship quality. The technique uses a statistically‐based learning procedure modelled on the workings of the human brain which quantifies the relationship between input and output variables through an intermediate “hidden” variable level analogous to the brain. For this study, a neural network was developed with two outcome components of relationship quality (relationship satisfaction and trust), and five input antecedents (the salesperson′s sales orientation, customer orientation, expertise, ethics and the relationship′s duration). In a comparison of multiple regression and neural network techniques, the latter was found to give statistically more significant outcomes. New applications within marketing for neural network analysis are being found. Contributes towards the development of the technique and suggests a number of further possible applications.

Relationship marketing has received a lot of attention recently as a “Big new idea”. Unfortunately, the term currently means different things to different people. At one extreme, it is seen tactically as little more than the creation and manipulation of databases, something that is almost synonymous with Direct Marketing. At the other extreme, relationship marketing is viewed as a philosophy that goes to the heart of business by putting customers — and their changing needs — as the focus of everything an organisation does. Instead of organising around brands, companies organise around the need to sustain the confidence of their customers and gain an increasing share of their wallet. In the research to be discussed here, relationship marketing is interpreted as business strategy which is aimed at turning casual, discrete transactions between buyers and sellers into an ongoing relationship through tactical devices such as database marketing and loyalty programmes.

The purpose of this paper is to investigate the impact of relational benefits on customer satisfaction in retail banking. This paper presents a causal model that identifies a connection between the relational benefits achieved through a stable and long‐term relationship with a given bank and customer satisfaction with retail banking.

Based on a theoretical framework regarding the relationship between relational benefits and customer satisfaction, an empirical study using a sample of 204 bank customers was conducted, and the theoretical model is tested. Multi‐item indicators from prior studies were employed to measure the constructs of interest, and the proposed relationships were tested using structural equations modeling methods.

The results show that confidence benefits have a direct, positive effect on the satisfaction of customers with their bank. However, special treatment benefits and social benefits did not have any significant effects on satisfaction in a retail banking environment.

This study was conducted in a retail banking setting, and may not be generalized in other service sectors. It has also focused on the relationship between relational benefits and satisfaction, while other factors that may have an influence on consumer satisfaction have not been considered.

The findings suggest that banks can create customer satisfaction through relational strategies that focus on building customer confidence. Therefore, frontline employees should be committed to establishing and maintaining confidence benefits for customers.

Interest in the subjects of relational benefits and customer satisfaction has been growing among marketing researchers and practitioners. The present study provides useful information on the relationship between customer satisfaction and specific relational benefits in retail banking.