Customer Divestment

SUMMARY

Customer lifetime value (CLV) models are designed to identify high-value customers to be retained. By implication, the remaining customers must be divested. This aspect of CLV management, customer divestment, has not been addressed in research. In this paper we describe the process of customer divestment, report a framework enabling firms to implement customer divestment (Mittal, Sarkees, and Murshed, 2006), and identify key issues associated with the customer divestment process. In doing so, we formulate some key research questions and an agenda for future research.     

Customer Valuation as a Driver of Relationship Dissolution Sabrina Helm Heinrich-Heine-Universitaet,Germany

Abstract

As all customers are not created equal (Hallberg & Ogilvy, 1995), the different contributions of customers to a supplier's goals have to be evaluated to grant efficient relationship marketing. Furthermore, a handling system has to be developed for unprofitable customer relationships. This is a hitherto neglected field, as marketing researchers and practitioners are generally rather interested in attaining and keeping customers, not in the ending of relationships. The article aims at integrating the concepts of customer equity and profitability with approaches of relationship dissolution, which have recently emerged in the literature. Different aspects of calculating the value of customer relationships and value-based criteria that focus on monetary and non-monetary components of a customer's value are discussed. In an exploratory study undertaken in the German mechanical engineering industry, the relevance of customer valuation to dissolution decisions is analyzed.     

Customer Selection and Prioritization

Abstract

That a firm benefits most when customers stick around for the long haul is a central premise of relationship marketing. This conviction has manifested itself over the past decade in the form of numerous formal loyalty programs that aim to seek and foster customer relationships. Scant evidence for the success of such programs has accrued since. This has lead firms to re-evaluate their investments in customer relationship management. Optimal resource allocation models address issues of relative investments in customer acquisition versus retention, and on managing relationships with profitable customers so that the value of a firm's customer base is maximized.     

CLV

SUMMARY

It is becoming increasingly clear from the literature that there is a need for a metric that can objectively measure future profitability of the customer to the firm. This paper traces the emergence of such a metric—the customer lifetime value (CLV) and discusses the two measures of computing CLV—the aggregate approach and the individual level approach. Subsequently, eight strategies that are available to firms for maximizing CLV are discussed. These strategies assist firms in deciding how to: select the best customer, make loyal customers profitable, optimally allocate the resources, pitch the right product to the right customer at the right time, link acquisition and retention to profitability, prevent customer attrition, encourage multi-channel shopping behavior, and maximize brand value. Each of these strategies was successfully implemented by different firms across various industries, resulting in significant increases in the bottom-line. Further, the challenges in implementing a CLV-based framework in a B-to-C organization are also discussed with an illustration.     

基于AHP的航空货运客户价值细分方法研究

在资源有限的条件下,企业必须将资源投放到那些有利可图的客户上,因此有必要进行客户细分,对于处在激烈竞争环境中的航空货运尤其如此。本文借鉴客户价值细分理论,以客户的当前价值和增值价值为细分依据,提出基于层次分析法的航空货运客户价值细分方法。     

Exploring the Internal Customer Mind-Set of Marketing Personnel

SUMMARY

With a traditional focus on external customers, marketing personnel could be expected to provide a leadership role in bringing an internal customer focus to the organization. In this study, we focus on the internal customer mind-set (ICMS) of marketing personnel and how this might impact the organization. We present a theoretically driven model that integrates current human resources literature by representing ICMS as a mediator of job satisfaction/organizational commitment and job performance/turnover intentions. The most notable results are found between ICMS and job performance, through both direct and indirect effects. Future research and study limitations are discussed.     

Enriching Customer Value Research with a Relational Perspective

Abstract

Much of the research on customer perceived value in marketing has been guided by a transactional view, in which determinants of value perceptions are studied with a focus on discrete transactions rather than recurring exchange relationships. Using data collected from a survey of organizational buyers, we found that perceptions of both relational benefits and relational costs significantly influence organizational buyers' perceived value. These effects remained significant when compared with those of perceived episodic benefits and costs. Our research underscores the need for a relational perspective of customer perceived value, whereby both episodic and relational antecedents of value should be accounted for and influenced by elements of the marketing mix.     

Dimensions and Implementation Drivers of Customer Equity Management (CEM)—Conceptual Framework,Qualitative Evidence and Preliminary Results of a Quantitative Study

SUMMARY

Customer equity has become a major marketing goal in many industries. In the existing literature on customer equity, there is a strong emphasis on measuring customer equity (or customer lifetime value), while there is a lack of research on how to manage customer equity and how to implement a systematic Customer Equity Management (CEM). In this paper, based on theoretical considerations as well as on qualitative and quantitative research applying confirmatory factor analysis, we identify three dimensions of Customer Equity Management structuring a firm's CEM activities: analytical CEM, strategic CEM and operational CEM. Further, three types of CEM implementation drivers are identified which represent determinants of the three CEM dimensions. We develop measures for both the three CEM dimensions and the three implementation drivers. These measures help companies evaluating their status regarding CEM and represent the basis for empirical studies regarding the determination and effects of CEM.     

A Preliminary Study of Fintech Industry: A Two-Stage Clustering Analysis for Customer Segmentation in the B2B Setting

ABSTRACT

This practitioner note proposes a new approach considering two-stage clustering and LRFMP model (Length, Recency, Frequency, Monetary and Periodicity) simultaneously for customer segmentation and behavior analysis and applies it among the Iranian Fintech companies. In this practitioner note, the K-means clustering algorithm and LRFMP model are combined in the customer segmentation process. After initial clustering, for a better understanding of valuable customers, additional clustering is implemented in segments that needed further investigation. This approach contributes to a better interpretation of different customer segments. Customer segments, consisting of 23524 business customers are analysed based on their characteristics and appropriate strategies are recommended accordingly. The first stage clustering result shows that customers are best segmented into four groups. The first and fourth segments are clustered again and the final 11 groups of customers are determined. This note provides a systematic and practical approach for researchers and practitioners for segmentation, interpretation, and targeting of customers especially in the B2B setting and the Fintech industry and helps managers to make effective marketing strategies and enhance customer relationship and marketing intelligence.     

顾客承诺的内涵、维度及影响因素研究

顾客承诺是西方有关如何留住顾客的营销理论中继顾客满意、顾客忠诚之后又一重要概念。根据国内外学者对顾客承诺理论的研究,从行为层面和心理层面系统论述了顾客承诺的内涵。依据顾客承诺的产生将顾客承诺划分为盘算性承诺、情感性承诺、规范性承诺三个维度。综合国内外研究以及根据市场营销环境,分别总结归纳出顾客承诺三维度的主要影响因素:经济价值,转换成本;顾客满意,顾客信任;主观规范,优惠待遇。     

Customer Lifetime Value and Firm Valuation

SUMMARY

Unlike most marketing metrics, CLV provides information which is directly relevant to marketing decision makers, non-marketing executives such as CFOs, and financial analysts. This paper highlights why and how CLV is financially relevant. It explicitly compares CLV-based valuation with four finance-oriented methods (DCF, P/E ratio, customer counting, and extrapolation). We also discuss implications for marketing managers, financial executives as well as educators.     

New Perspectives on Customer Relationships: How Relational Models Influence Customer Experience and How They Are Activated

Abstract

Much research has been conducted into the determinants of customer experience. However, these studies do not include relationship norms as a possible determinant of customer experience. Nevertheless, there are strong indications that the relationship norms used by a customer are an important factor in customer behavior and customer experience. The purpose of this paper is to investigate the influence of relational models on customer experience and to explain possible differences in presence of relational models. This paper describes the results of two studies. The first study focuses on the effects of relational models on customer experience. This first study shows that the type of relationship has a strong influence on customer experience in terms of consumption emotions, customer satisfaction, and recommendation intention. Knowing that differences in the presence of relational models have a strong influence on customer experience, a second study focuses on finding a possible explanation for the differences in the presence of relational models. We hypothesize that differences in the presence of relational models can be explained by how organizations approach their customers and how customers perceive the organization. Especially, the perceived organizational involvement and freedom of choice as perceived by the customer play an important role. The second study, therefore, focuses on the influence of perceived organizational involvement and freedom of choice on relational models. The study shows that organizational involvement and freedom of choice have a significant impact on the activation of relational models. The findings are interesting for organizations that want to improve customer experience.     

基于优质客户盈利能力的客户保持策略

当今的客户管理已经不再仅仅局限于树立"客户是上帝"的传统观念,客户也有可能成为"魔鬼",给企业带来坏账、诉讼等,导致企业经济利益流失,单纯地扩大市场份额并不一定能够确保持久的竞争优势.为更好地实现企业价值,现代企业应通过分析客户盈利率来寻找优质客户,通过理解并响应客户的需求和愿望、提升质量与品牌形象、进行感情投资及忠诚营销计划等来维系优质客户.     

Ignoring Your Best Customer?

Abstract

Many organizations devote considerable amounts of money and human resources to develop systems aimed at improving customer retention and profitability. The conventional wisdom is that if retaining the most profitable customers is a good way to increase profitability, then allocating resources to increase the satisfaction of those customers has to be a great objective. However, managers do not observe clear link between satisfaction, retention and profitability. The reason is that different customers have different preferences for convenience as well as different costs associated with switching service providers. These preference and cost heterogeneities have important implications for how companies should target their customer service efforts.

In this paper, we adopt a latent class model to examine the interrelationship amongsatisfaction, retention and profitability. Applying the model to a data of customer satisfaction, self-reported switching propensity, and profitability provided to us by a large Midwestern bank, we make normative statements about which customers are the most criticalones for the company to satisfy and how to satisfy them. The results of this research help to explain why managers have been frustrated by the apparent lack of actionable information present in customer satisfaction data and points to more intelligent ways to use this data.     

Examining the Relationship Marketing,Marketing Productivity Paradigm

Abstract

The authors examine the relationship marketing research literature and identify three schools of thought regarding relationship marketing. The Inter-organizational, customer relationship, and customer valuation research perspectives are described and representative studies are discussed. The predominant conceptual approaches to marketing productivity in the research literature are identified and described. The shareholder value model of Srivastava, Shervani, and Fahey (1998) is selected as the most useful conceptual framework linking relationship marketing and marketing productivity. The linking constructs of customer equity and brand equity are identified as the critical conceptual connections between relationship marketing and marketing productivity. A research agenda is suggested, covering both conceptual and operational issues for further development of both relationship marketing and marketing productivity.     

Receiving,Recording, and Responding to Customer Complaints: The Effects of Formalizing Customer Complaint Handling Policies in Retail Firms

ABSTRACT

Given the critical need for retail firms to provide high quality customer service and satisfaction, this article investigates the importance of formalizing customer complaint handling policies and procedures with regard to its relationship to the ways in which retail companies receive, record, and respond to customer complaints. A survey of 184 firms from the retail environment of a midsized community reveals that the existence of such formalized procedures is significantly associated with firm size, better channels of communication with customers, mechanisms of recording customer feedback, and better-trained employees, which have been shown to relate to higher firm performance.     

Approaches to the Measurement and Management of Customer Value

SUMMARY

Determining and managing customer lifetime value is one of the most important strategic objectives of companies today. This paper critically examines some of the most popular approaches traditionally used to measure the value of customers in a company's portfolio. The methods reviewed include RFM and total revenue approaches to differentiating the value of customers. Although these methods have relative advantages, they have serious drawbacks that limit the ability of managers to accurately assess customer value. An alternative model for the measurement and management of customer value is proposed.     

Trialogue on Facebook pages of grocery stores: Customer engagement or customer enragement?

Abstract

The pervasiveness of social media is compelling businesses to review their way of managing customer experiences. Businesses use social media to interact and engage with customers. Several studies have studied why businesses have adopted social media. However, there is a dearth of research as to why customers interact with businesses on social media in the grocery sector. This paper aims to explore how and why customers react to corporate messages on Facebook pages of Tesco and Walmart. Netnography approach was adopted to gain an insight into the various ways customers engage with the grocery stores on its Facebook pages. This study reveals that social media empower customers, influence the relationships customers have with grocery stores and generate customer engagement. Findings also show that the social customer is both a curse and a blessing to Tesco and Walmart when they create or destroy value for the business. This paper contributes to knowledge by (1) uncovering how customers react to corporate and customer posts on corporate Facebook pages; (2) showing how value can be created and destroyed; and (3) proposing a model illustrating how the main constructs of the study are interconnected: social media, relationship marketing, customer empowerment and customer engagement.     

SALCUSTOR: A Multidimensional Scale for Salespersons’ Customer Orientation and Implications for Customer-Oriented Selling: Empirical Evidence From India

ABSTRACT

Recent studies have highlighted the limitations in the applicability of the selling-versus-customer orientation scale as a measure of a salesperson's customer orientation. Therefore, few scholars call for new research on identifying the underlying dimensions of customer-oriented selling and for developing a new scale. This study provides a new conceptualization of a salesperson's customer orientation and develops and validates a multidimensional scale to measure it. This scale, SALCUSTOR, uses multiple samples of data from salespersons from India. SALCUSTOR assesses the degree to which a salesperson (a) provides relevant and correct information to his/her customers, (b) understands and learns the underlying needs of the customers, and (c) maintains relationships with customers and thinks about their long-term benefits. We establish the reliability, convergent, discriminant, and nomological validity of SALCUSTOR. Managers can use SALCUSTOR to identify specific gaps in the three dimensions of customer-oriented selling behaviors of the salespersons, using appropriate intervention strategies.     

论商业银行顾客忠诚度的提高

忠诚的顾客对商业银行的经济效益影响极大,影响顾客忠诚度的因素有转移成本、顾客满意、顾客信任以及顾客感知价值。要提高商业银行的顾客忠诚度,必须在“以客户为中心”的理念的指导下,在利用数据仓库,对顾客进行分类管理,提供个性化服务的同时,进行业务流程创新,实行内部营销。