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Forming Service Relationships with Hotel Business Travelers: The Critical Attributes to Improve Retention

University of Southern Queensland, scanlan{at}ausinfo.com.au

Janelle McPhail

University of Southern Queensland, mcphail{at}usq.edu.au

Customer defections have been linked to service encounter failure in service organizations. This study embraces the idea of improving customer retention through proactively promoting the important role of the interpersonal service encounter to build long-term service relationships between customers and service organizations. More specifically, this study determined the critical relational attributes in the face-to-face service encounter that were most influential in the formation of a service relationship from the business traveler’s perspective. Five critical relational attributes were selected and tested in a high interpersonal service context; namely, a hotel reception encounter. Through factor analysis, the number of factors (critical relational attributes) was reduced from five to four. The results from multiple regression analysis revealed that hotel guests perceived personalization, social bonding, reliability, and familiarization to be most influential in the relationship formation process in that order of significance. Based on the findings, management could develop proactive relationship-building strategies to build customer loyalty and thus reduce the need to use recovery strategies by focusing on the psychological needs emulated in the critical relational attributes.

Key Words: customer retention • service encounter • relationship formation • critical relational attributes • hotel customers and service providers

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