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Top1. Introduction
Service organizations operate in a highly competitive marketplace where it imperative to produce high-quality services that delight customers, thereby creating and building strong customer-firm relationships (Barwise & Meehan, 2004). However, in many service industries, high service quality is not sufficient to create strong relationship between organizations and customers for two reasons. “First, competing firms may also offer high-quality service. Second, there is a perception that customers are unlikely to notice or appreciate small improvements or differences in service quality because today’s offerings (physical goods and services) are already at a relatively high standard” (Bolton, Gustafsson, McColl-Kennedy, Sirianni & Tse, 2014:254).
Companies compete best when they combine functional and emotional benefits in their offering. Emotional bonds between companies and customers are difficult for competitors to sever. To compete successfully in this territory, a growing number of service organizations are systematically applying the principles and tools of customer-experience to strengthen the relationship with customers and enhance their reputation (Luigi, Oana, Mihai & Simona, 2012). In the same vein, Gentile, Spiller and Noci (2007:397) believe that “customer experience is a new lever to create value for both company and customer and a good experience must holistically” and “consistently involve a person at different levels” (Sheng & Teo, 2012:140). Previous research suggests that engendering superior customer experience is one of the ways to achieve successful marketing outcomes and further improve a firm’s chance of success (Berry, Carbone, & Haeckel, 2002; Verhoef et al., 2009).
A recent survey by “Bain & Co. of 362” companies found that 80% of the senior executives interviewed said they provided an excellent customer experience, but interestingly, only 8% of their customers agreed” (Kim & Choi, 2013:324). Thus, the investigation of the ways in which experiences can influence consumers at the post-consumption stage is critical (Fetscherin, 2014). Notwithstanding “increasing attention, customer experience remains an elusive concept mainly applied to hedonic settings, while empirical studies in weak experiential contexts are still lacking” (Fernandes & Pinto, 2019:38).
Good relationship quality between customers and their companies is one of the consequences of guest experience in hotel sector (Rajaobelina, 2018). Despite “the evaluation of RQ should depend on the experience provided, empirical evidence on how customer experience may contribute to RQ is scant” (Fernandes & Pinto,2019:38). As a customers’ relationship with the company extends, companies can duplicate their profits through retaining just 5 percent more of their customers (Reichheld & Sasser, 1990). The longer a customer stays in the relationship with a hotel, the more profitable to the hotels. Thus, “in highly competitive hotel industry, quality relationships with customers are considered a key element of business uniqueness through which firms pursue their corporate reputation” (Wu, Cheng & Ai, 2018:202).
Previous scholars underscored relationship quality in the increasingly competitive hotel industry (Kim & Kim, 2016; Wu & Cheng, 2018). Castellanos-Verdugo et al. (2009:252) asserted that “in the hospitality industry, even though those positive effects are recognized, there is a lack of specific research and, due to this, there are no detailed indications of how appropriated management of relationship quality antecedents could be used to produce desired and expected results” for organizations such as reputation.
Reputation is essential for corporate success in long run and under severe competition. Reputation for service organization has been understood as a competitive advantage (Balmer & Greyser, 2003). It also represents “one of the determinants of consumers’ purchase decision making” (Carmeli & Tishler, 2005:13). Corporate reputation “has been further argued to be one of the most important indicators for service providers and it has been found to be a better predictor of customers' behavioral intentions” (Wu et al., 2018:203). Among the hospitality industries, “the hotel sector is the one that invests a lot in building its image and reputation” (Lai, 2019:111). Despite the numerous studies in customer experience, relationship quality and corporate reputation that had been done in service organizations (e.g. hotel sector), there is a shortage in studies that aim to testing the mediate role of relationship quality among CE and CR in the hotel industry (see Figure 1).
Figure 1. Summary of research results