While service quality, trust and commitment are frequently cited as critical to achieving important firm outcomes, the role of service differentiation in this framework is largely unknown. Yet, differentiation is important because a firm's distinctiveness is linked to client‐perceived value, competitive advantage, and a target market focus. Thus, the purpose of this study is to examine the role of service differentiation in business‐to‐business relationships.
Hypotheses were tested using a sample of business clients from a large European financial services firm. The senior primary contact in each client firm was contacted by phone/e‐mail to arrange for completion of the survey. Using the survey instrument, respondents provided information on their relationship with the provider organization.
Results indicated that service quality had an impact on trust, differentiation and relationship outcomes. Trust was found to drive service differentiation. Differentiation, in turn, drove commitment which ultimately had an impact on both satisfaction and word‐of‐mouth. Importantly, it was found that service differentiation is a full mediator of the impact that service quality and trust have on client commitment towards the firm.
The findings clearly show the importance of service differentiation in achieving high levels of relationship commitment and ultimately satisfaction and positive word‐of‐mouth. As the role of differentiation in business‐to‐business relationships has received limited research focus, this paper offers managers new insights into relationship development. Importantly, differentiation is a managerially controlled variable that firms can use to influence relationship outcomes.
