Good and bad customers: the benefits of participating in the banking relationship

The development of effective customer relationships is widely advocated as a key element of marketing strategies in the service sector. The advantages associated with the development of such relationships are thought to be particularly relevant in the case of services for which credence qualities are high. However, a key feature of most services is customer participation in the production and the delivery of the service. The ability of an organization to develop and maintain a relationship with its customers will be dependent on their willingness to participate. For participation to be worthwhile, customers must perceive that it yields benefits which are greater than those which accrue from non‐participation. Examines the extent to which participation in the banking relationship occurs and the implications of this for quality of service, using evidence from a survey of over 6,000 UK small businesses.