Life after death? Analyzing post-defection consumer brand equity

The industry literature is full of the idea of winning back lapsed customers. Yet marketing practitioners and academics know very little about what happens to customers after they stop buying the brand. This research investigates the brand equity of lapsed customers of five major financial institutions. The analysis compares the propensity for positive and/or negative brand associations, overall brand evaluation, and the propensity to consider the brand in the future across the main segments of lapsed customers. The results show that the group of lapsed customers is not homogenous, but consists of distinct segments. Customers who defected for different reasons also differ in their post-defection brand equity. The paper concludes with implications for winback strategies for lapsed customers and brand equity measurement and management.     

Customer defection due to service elimination and post-elimination customer behavior: An empirical investigation in telecommunications

Service industries require rapid innovations in their service portfolios to gain and maintain competitive advantages. Service elimination is a potential tool for portfolio renewal, though it might threaten increased defection rates. To contribute to both service elimination and customer defection literature, this paper proposes a model of customer responses to service elimination, with practical implications for decision-makers in rapidly innovating telecommunication markets.In particular, the main study, conducted in the context of Hungary’s telecommunications sector, reveals that customers’ tenure, usage intensity, and age reduce the negative effects of a price increase on their defection; the price increase, degree to which customers interact with service providers, customer defection, and competitive effects in turn increase post–service elimination usage intensity.These findings suggest implementation strategies that can reduce customer defection following price increase due to service elimination, by focusing on new customers, light users, and the quality of customer interactions.     

The Effect of Pricing and Advertising on Customer Retention in a Liberalizing Market

This study investigates the drivers of customer retention in a liberalizing market. The authors address key retention issues that allow them to contribute to existing retention research in several critical ways. They (1) examine the effects of pricing and mass advertising, (2) account for (new entrants) competitors' actions, (3) investigate the dynamic impact of marketing tactics, and (4) study the proposed relationships in a market recently opened to competition. Using longitudinal data for a sample of 650 mobile phone consumers and a split-population hazard model that accounts for the notion that some customers are never at risk of defection, the authors show that both the focal firm's (incumbent) and the competitors' price and mass advertising exert a significant influence on the probability of terminating an existing incumbent relationship. They find that the relationships between marketing variables and retention are not static but vary over time. Price is generally less effective in the early stages of market liberalization, which suggests that customers become more price sensitive in later stages. Finally, the study findings can have important strategic implications on designing customer management and marketing resource allocation strategies, as well as on providing a competitive regulatory framework in liberalizing markets.     

Getting Lapsed Donors Back: An Empirical Investigation of Relationship Management in the Post-Termination Stage

Firms lose customers for various reasons all the time, raising the question of whether to stop marketing to these customers or to try to win them back through sending more marketing instruments. The answer lies in knowing the probability of regaining a lapsed customer. However, since customers have various reasons for dropping out, identifying which customers are worth reviving becomes important. This article examines this issue in a donation context, using data from a large not-for-profit organization. Results suggest that sending marketing communications with an appropriate frequency has a positive influence on reviving lapsed donors but sending overly frequent communications may evoke resistance to appeals. Furthermore, the varied behavioral histories and characteristics of lapsed donors affect the probability of revival. The article provides a useful approach to fundraising managers in a not-for-profit industry.     

Brand attachment and customer citizenship behaviors

Service brand attachment has emerged as a growing body of research. Although previous studies have examined the relationship between brand attachment and customer behaviors, the mechanism underlying this relationship remains unknown, particularly in a service context. The purpose of this study was to examine the relationship between brand attachment and customer citizenship behaviors and to clarify the role of perceived value among regular customers of international hotel brands in Taiwan. To examine this model, confirmatory factor analysis was employed to analyze survey data from 299 hotel customers, the results of which indicated that perceived value completely mediated the relationship between brand attachment and customer citizenship behaviors. Therefore, perceived value is the mechanism that explains how service brand attachment is associated with customer citizenship behaviors. These results demonstrate the importance of perceived value and imply that service managers should strengthen customers’ perceived value of service brands to enhance customer citizenship behaviors.     

Exploring the post-termination stage of consumer–brand relationships: An empirical investigation of the premium car market

This research extends customer lifecycle models to include a post-termination stage that bridges the dissolution stage of a consumer–brand relationship with a potential recovery stage. Drawing from 43 depth interviews with former customers of a car brand, this study relies on grounded theory and triangulation to explore consumer responses in the post-termination stage and finds evidence for both negative and positive customer responses after dissolution. The authors combine qualitative techniques with categorical principal component analysis (CATPCA) to explore the dimensionality of post-termination responses and extract relationship-related and termination-related response dimensions. They use these dimensions to identify four distinct post-termination customer clusters, which differ systematically with the customer's termination reasons, as demonstrated through a series of exact logistic regressions. In addition to providing evidence of a post-termination stage, this study offers implications for customer relationship management.     

Determinants of ex-customer winback in financial services

Financial services play important roles in consumers' lives, and switching providers is a relatively onerous task, but customers often terminate their relationships with a provider. How can a provider best regain lost customers, and what are the determinants of ex-customer winback? Using data from a financial services provider, this research examines 11 factors occurring before, during and after a termination, to study their influence on consumers' propensity to revive a relationship with a previously abandoned service provider. The results indicate that income and variety-seeking preferences are negatively correlated with a customer's likelihood of considering the former brand in the future. Positive associations and evaluations of the former brand are positively correlated with the winback potential. The results can guide managers of financial service providers as to the most significant factors to be analysed in estimating the chances of winning back a lost customer.     

Transformation of Metrics and Analytics in Retailing: The Way Forward

The retail industry is undergoing tremendous changes that are driven by technology, changing consumer tastes, economic pressures, competition, stakeholder relationships, environmental concerns, and governmental regulations. Our article explores analytics as a capability that helps retailers excel in this dynamic environment. We identify the reasons behind the trends in the retail industry and provide guidance for retail managers on how to improve customer relationship management using appropriate metrics and effective analytics. Our guidance to retail managers emphasizes the importance of brand recognition, explores tactics for enhancing customer experience, recommends establishing superior customer engagement, forging social connections among consumers, and rendering service and support to customers, and highlights a data-oriented approach to retailing. We conclude with suggestions for future research in this domain.     

How small service failures drive customer defection: Introducing the concept of microfailures

Service that falls below customer expectations is framed as a service failure. While many researchers have investigated service failures, they have tended to focus on large service failures. This is likely because large failures are more noticeable by firms and more likely to prompt customer complaints than small failures. However, we argue that smaller service failures can cause as much damage as larger failures, and in some cases even more. We introduce the concept of service microfailures, which we define as instances when a customer’s expectations go unmet in some small way. While minor in isolation, repeated service microfailures that go unnoticed and unrecovered can compound in effect and drive customer defection. For this reason, we propose that service microfailures are a potentially much larger managerial problem than they may appear on the surface. In this article, we conceptualize microfailures as a distinct form of service failure and outline the mechanism through which they cause damage. We then develop a multifaceted approach through which managers can detect, repair, and prevent service microfailures.     

How to grow a brand: Retain or acquire customers?

While customer acquisition is clearly important for new brands, mature brands are often said to rely on defection management for maintenance and growth. Yet the theory to support this approach has been subject to very little empirical investigation. How do brands actually increase the size of their customer base? Through superior acquisition or by reducing customer defection? Or some mixture of both? Conversely, do brands decline through deficient acquisition or excessive defection? This work analyzes changes in ‘first brand loyal’ customers to answer these questions, using a combination of panel data on the prescribing behavior of doctors and a cross-sectional tracking survey for residential finance. This study is the first research to compare defection and acquisition against stochastic benchmarks for customer churn under stationary conditions. The results are surprising: for both growth and decline, unusual acquisition plays a much stronger role than unusual defection. This finding demonstrates that acquisition has been under-rated in the past, and implies that prospect management is at least as important as defection reduction. A simulation shows that unusual acquisition also accounts for far more improvement in profit than does unusual defection.     

Marketing Effectiveness and Customer Retention in the Service Sector

Recent years have witnessed a growth in the number of studies relating to service orgrrnisations. This steady stream of literature could be attributed to the continuous expansion of the service sector and its increasing contribution to the advancement of many economies. In this context, issues associated with marketing and performance outcomes which managers can influence directly have received a great deal of attention. This research focuses on an empirical investigation of the relationship between marketing effectiveness and customer retention performance in an attempt to contribute to the growing body of conceptual and empiricul knowledge on the links between marketing and performance among service firms. Drawing on our results which indicate a significant and positive association between marketing effectiveness and customer retention, implications of the findings for service firm managers as well as future research directions are subsequently discussed.     

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.     

DRIVER RELATIONSHIPS WITH CUSTOMERS AND DRIVER TURNOVER: KEY MEDIATING VARIABLES AFFECTING DRIVER PERFORMANCE IN THE FIELD

To reduce cost and improve service, logistics managers must give attention to the critical interaction between customers and the carriers who deliver products. This research tests the premise that internal marketing with truck drivers is associated with improved relationships with customers, retention of customer‐conscious drivers, and higher driver performance.     

Building Bridges: The Company-Customer Relationship

ABSTRACT

With increasing emphasis on relationship selling, a bond is often formed between the salesperson and each customer. When a salesperson leaves to work for a competitor, customers may follow. Small companies are particularly vulnerable since they lack the resources necessary for many sales force retention strategies. The suggestion is made that such companies can implement “bridging strategies,” company-level relationship strategies designed to supplement the relationship between the sales rep and the customer, with the distinct objective of retaining customers following salesperson defection. Using the three levels of relationship marketing described by Berry and Parasuraman (1991), specific bridging strategies are identified and analyzed. The pharmaceutical industry is discussed as an example.     

The United Nations Global Compact: Engaging Implicit and Explicit CSR for Global Governance

In the past few decades, a growth in ethical consumerism has led brands to increasingly develop conscientiousness and depict ethical image at a corporate level. However, most of the research studying business ethics in the field of corporate brand management is either conceptual or has been empirically conducted in relation to goods/products contexts. This is surprising because corporate brands are more relevant in services contexts, because of the distinct nature of services (i.e., intangible, heterogeneous, and inseparable) and the key role that employees have in the services sector (i.e., they can build or break the brand when interacting with customers). Accordingly, this article aims at empirically examining the effects of customer perceived ethicality in the context of corporate services brands. Based on data collected for eight service categories using a panel of 2179 customers, the hypothesized structural model is tested using path analysis. The results show that, in addition to a direct effect, customer perceived ethicality has a positive and indirect effect on customer loyalty, through the mediators of customer affective commitment and customer perceived quality. Further, employee empathy positively influences the impact of customer perceived ethicality on customer affective commitment, and customer loyalty positively impacts customer positive word-of-mouth. The first implication of these results is that corporate brand strategy needs to be aligned with human resources policies and practices if brands want to turn ethical strategies into employee behavior. Second, corporate brands should build more authentic communications grounded in their ethical beliefs and supported by evidence from actual employees.     

零售商品牌资产管理策略体系构建——基于多维理论视角的探讨

零售商品牌资产的管理和创建是零售企业获取持续竞争优势的关键,但关于零售商品牌资产管理策略的理论指导并不系统和丰富。因此,本文从零售商品牌营销管理、顾客情绪管理、顾客体验管理、顾客关系管理、顾客忠诚管理5个多维理论视角,对零售商品牌资产管理的策略体系进行了构建,以期为零售商品牌资产的创建过程和途径提供丰富的管理视野与思路。     

Customer satisfaction and brand equity

The study here examines the interaction between shareholder value and customer satisfaction, as well as the impact on a firm's brand equity. Customer satisfaction may have a positive effect on brand equity, except when managers show excessive customer orientation, in which case the effect is negative because of reductions in shareholder value. The empirical analysis uses incomplete panel data pertaining to 69 firms from 11 nations during the period 2002-2005 and supports the theoretical contentions. This result warns of the perverse effect on brand equity of implementing policies focused exclusively on satisfying customers at the expense of shareholders' interests.     

从家电企业谈顾客维系

随着家电市场竞争的日益激烈,顾客流失较为普遍,顾客的维度减弱已成为家电制造企业生存和发展中的最大困惑。产品质量缺陷、顾客对售后服务不满意、竞争对手夺走顾客、与顾客缺乏沟通是主要成因。有效防止顾客流失,企业应加快从＂以产品为核心＂向＂以顾客为中心＂转变,采取积极建立顾客档案、实施全面质量管理、提高服务质量、对顾客进行关联管理等有效措施,增强企业对顾客的维系度,降低顾客流失风险,提升市场竞争力。     

The Impact of Other Customers on Customer Citizenship Behavior

Despite extensive research on the antecedents of customer citizenship behavior, the influence of other customers remains a neglected area in service research. Drawing on social information processing and interpersonal influence theories, this article investigates how citizenship behavior of focal customers is shaped by citizenship behavior of other customers. This study also examines how informational influence in the form of other‐customer credibility and normative influence in the form of customer social identity moderate this relationship. Using qualitative and quantitative data, this study shows that other‐customer citizenship behavior drives focal customer citizenship behavior. This link is also moderated by informational influence (other‐customer credibility) and normative influence (social identity). From a theoretical standpoint, the findings provide preliminary evidence that other‐customer focus is critical to an understanding of customer citizenship behavior. This study also identifies the boundary conditions for these relationships. From a practical standpoint, the findings suggest that managers need to identify and pay attention to customers who exhibit citizenship behavior so that customer citizenship behavior is reciprocated and extended to other customers in the service encounter.