Creating customer loyalty through service customization

What is it about?

This paper answers three questions about the effectiveness of service customization: 1) Can service customization serve as customer relationship management instrument? 2) How does service customization affect customer loyalty? 3) When should firms customize their services?

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Why is it important?

We give three clear answers: 1) Service customization ultimately increases customer loyalty and is thus a viable customer relationship management instrument. 2) While service customization has only a relatively small direct effect on customer loyalty, it has a substantial indirect effect on customer loyalty by increasing perceived service quality, satisfaction, and trust. 3) Service customization is most effective if customers highly trust a firm but are not entirely satisfied, yet.