Advantages

If a service provider is able to create a more or less solid relationship with its clients, this can reduce the insecurity among its customers. For the providers this is an advantageous position with the following beneficial effects:

• A higher number and pace of orders.
• A limitation of the marketing efforts, as less new clients are needed.
• A higher degree of efficiency, since the provider and client get to know each other.

Three Factors

The strength of such a provider-client relationship depends on three factors:

• Contentment: does the provider live up to the promise?
• Attractiveness: are there attractive alternatives?
• Transfer costs: how much does it cost to break up the current relationship and start a new one?

Contentment and attractiveness are results of the total of marketing efforts done by the provider, such as a good implementation of the service providing process (contentment) and a good position on the market (attractiveness). Important here is that the relationship between provider and client will only be satisfactory for the latter as it scores high on both the:

• Achievement aspect: the quality of the service provided, and the
• Personal aspect: a good mutual understanding on a personal level.

Transfer costs are a structural bond. This comes into play when investments have been made that will result in the loss of capital if the relation with the provider will be ended. In the service sector this frequently occurs when service providers and clients attune their processes to each other.

Three Client Binding Programs

Another way for a provider to attach clients to itself, is offering client binding programs. In general, three types of such programs can be discerned:

• Facilitation or saving programs: this means programs that are aimed to deliver services and facilities along with offering save and promotion possibilities. This is a case of financial attachment.
• Affinity programs: this type of program aims to create a social bond by delivering an extra service or distinct advantages to a certain client. These advantages do not have to be service-bound, but can be something completely else, such as collector’s items, or VIP tickets to a football match, and so on.
• Loyalty programs: these are focused on the spoiling of the real good clients in the form of special services that are service-bound and are a part of the total supply of services offered to the client. This might mean payment facilities or guaranteed place in an airplane, and so on.