Handbook of Service Marketing Research
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Handbook of Service Marketing Research

Edited by Roland T. Rust and Ming-Hui Huang

The Handbook of Service Marketing Research brings together an all-star team of leading researchers in service marketing to explore many of the hottest topics in service marketing today.
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Chapter 8: CRM metrics and strategies to enhance performance in service industries

V. Kumar, Nita Umashankar and Jee Won (Brianna) Choi


The importance of the service sector is undeniable. In fact, services now dominate, making up about 70 percent of the aggregate production and employment in the Organisation for Economic Co-operation and Development (OECD) nations and contributing close to 75 percent of the gross domestic product (GDP) in the United States (Bartash 2012). In the past few decades, many leading firms have added services to their existing product offerings in an attempt to provide total customer solutions, and, thus, to improve their competitiveness and profitability (Lusch et al. 2007; Sawhney et al. 2006; Wise and Baumgartner 1999). A service-centered view of marketing implies that marketing is a continuous series of social and economic processes that are largely focused on operant resources with which the firm is constantly striving to make a better value proposition than its competitors (Vargo and Lusch 2004a). Generally, the prototypical characteristics that have been identified as distinguishing services from goods include: intangibility, heterogeneity, inseparability, and perishability (IHIP). More recently, however, scholars have begun to question the validity and relevance of these four characteristics in distinguishing services from goods. For example, Vargo and Lusch (2004b) contend that the IHIP characteristics are remnants of the goods-based marketing model and lead to inappropriate normative strategies for service marketers. Lovelock and Gummesson (2004) also demonstrate that the IHIP paradigm fails to effectively and universally distinguish services from goods.

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