Service in the Digital Age: Relationship Marketing’s Next Upsurge

Guest article from Lena Steinhoff, recipient of the 2021 SERVSIG Emerging Service Scholar Award.

Relationships have been instrumental for business exchanges ever since Homeric Greece (e.g., Palmatier and Steinhoff 2019; Vargo and Lusch 2004). When the concept of relationship marketing eventually appeared in academic literature, it was no coincidence that it originated in service research, given services’ “inherently relational” nature (Grönroos 2015, p. 23; Vargo and Lusch 2008). Until today, Berry’s (1983) initial coining of the term has ignited four decades of rich academic research, promoting the consensus view that strong customer relationships are vital to company performance (e.g., Palmatier et al. 2006).

As the digital age progresses, relationship marketing, capturing “all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges” (Morgan and Hunt 1994, p. 22), will likely encounter its next upsurge, rather than reaching a maturity stage. In fact, being a service researcher who looks at service phenomena from a relationship marketing perspective potentially has never been more exciting in my view. Given the exponential advancements in computing technology, business exchanges take place in a more and more technology-mediated environment, with substantial implications for customer relationships. I would like to exemplarily illustrate two major developments and outline some big picture research questions inherent in these transformations that intrigue me in my current work.

First, service providers’ efforts to effectively build and nurture relationships with their customers largely materialize at the service frontline. Here, traditionally, interpersonal social ties evolve in human-to-human interactions between frontline employees and customers, which then might spark customers’ loyalty to the service provider. Yet, in the digital age, service frontlines are changing fundamentally. Specifically, technology infused into service frontline encounters partially or entirely substitutes human representatives of the service provider (De Keyser et al. 2019; Marinova et al. 2017). Formerly human-based service frontlines get replaced by hybrid or technology-based frontlines; providers of innovative digital services often rely on technology-based service frontlines only, such that most customers never interact with a human service employee. Overall, customers increasingly engage in human-to-technology rather than human-to-human interactions. From a relationship marketing perspective, the dehumanization of service frontlines raises important questions for service providers: When (e.g., in which service settings, for which customer journey touchpoints, in which relationship stage) do customers prefer human-based, hybrid, or technology-based frontline interactions? How could service providers combine different frontline agents to effectively manage customer relationships? How and to what extent may customers develop parasocial relationships with technological agents based on relational mechanisms such as commitment, trust, gratitude, or reciprocity?

Second, effective relationship marketing strategies have always relied on knowing customers well. Yet, through big data, service providers today collect information on their customers at an unprecedented scale. Thus, more so than ever, service provision is fueled by customer data. On the one hand, customers can benefit from increasingly personalized services. On the other hand, though, customers express discomfort about overly intrusive firm practices and the privacy of their data. Data privacy has thus emerged as a key priority, as reflected in the introduction of comprehensive data privacy regulations such as the European Union’s General Data Protection Regulation (GDPR) and the California Privacy Rights Act (CPRA) in the United States (e.g., Martin et al. 2020; Martin and Murphy 2017). Investigating the following relationship marketing-related questions can help service providers successfully navigate the challenges related to big data and data privacy: How can service providers use data privacy as a proactive relationship marketing strategy, going beyond just reactively complying with legal requirements? How can service providers design trust-building data privacy infrastructures that encourage customers to share their data? How do high-level data privacy regulations trickle down to service frontlines and how can different types of frontline agents (human-based, hybrid, technology-based) act upon these in their encounters with customers?

Overall, the digital age will continuously bring about new exciting phenomena in services that involve opportunities and challenges for both customers and service providers. I believe that employing a relationship marketing lens to look at these opportunities and challenges can make a valuable contribution to understand how service in the digital age can spawn strong, mutually beneficial relational bonds between customers and services providers.

Lena Steinhoff
Assistant Professor of Service Management
Institute for Marketing & Service Research, University of Rostock, Germany

Image credit: Stephen Phillips.

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