PurposeWhile 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.Design/methodology/approachHypotheses 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.FindingsResults 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.Originality/valueThe 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.

Focuses on the service performance gap, which occurs when service is not performed according to the standards set. It attempts to define the antecedents of the gap. The research is set in the European airline industry with a theoretical framework based on service quality and the trust‐commitment theory of relationship marketing. With support from a literature review on exchange theory, equity theory, role theory and the trust‐commitment theory of relationship marketing, 18 hypotheses are advanced to develop and test an alternative to the original model by Parasuraman et al. Data were collected from two European airlines. A postal survey of 600 customer contact employees produced 193 respondents, an overall response rate of 32 per cent. The empirical investigation involved the use of structural equation modelling to estimate the proposed model. Exploratory factor analysis was used to assess the measurement instrument. The study offers some support to the work of Parasuraman et al., in another industrial context. It extends their findings by proposing an alternative model, which shows that the service performance gap is influenced both directly and indirectly by a significant number of critical factors including trust, commitment and co‐operation.

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