Analysing the drivers of customer happiness at authorized workshops and improving retention

Due to increased business competition, customer happiness has drawn significant interest in recent times. With customer happiness at authorized workshops in mind, workshops are trying hard to give the best services to customers so that they feel happy and return even after free services. However, customers are not using regular maintenance services properly although their vehicles are still under warranty. Literature shows that there is a direct relationship between company performance and customer happiness. However, no literature is available related to sustaining customer happiness and improving retention after free services. Therefore, the study aims to identify the drivers of customer happiness at authorized automotive workshops and prioritize them, allowing service providers to improve services to help in improving customer retention even after free services. To achieve this aim, a two-phased research methodology was used. In the first phase, an extensive literature review was carried out to list drivers of customer happiness; and finalized the drivers empirically. Fuzzy Analytical Hierarchy Process (AHP) was employed in the second phase to prioritize the drivers. The ‘technological’ driver has been reported as the most important sustainable driver of customer happiness followed by ‘social’ driver. This study will help service providers to plan resources effectively and increase customer happiness at authorized workshops; this will improve retention even after free services. To check the robustness of results, sensitivity analysis is performed.     

Retaining customers in UK financial services: The retailers' tale

Retaining customers offers major benefits to retailers of financial services, such as improved customer profitability and lowered acquisition costs. In spite of the importance to the sector in minimising customer ‘churn’, there has been limited investigation into the practices of customer retention. This paper reports empirical research into the retention of customers in traditional retailers of financial services in the UK to study the practices involved in retention. Following a pluralistic research design, data were generated by means of interviews with senior bank staff and by surveying staff involved either directly or indirectly with retaining customers. The study discovers key elements in the practice of retaining customers and also points to a number of potential difficulties as these organisations balance the activities of customer acquisition and retention.     

The impact of customer-specific marketing expenses on customer retention and customer profitability

We study the effects of customer-specific marketing expenses on customer retention and customer profitability in a business-to-business setting. Using data from a company providing hygiene services, we look at the impact of a hitherto unstudied type of expense targeted at individual customer relationships: the offering of free equipment to customers. The data allow tracking the activities performed in more than 4,500 customer relationships over a period of 4 years. Retention rates are higher for customers targeted with free equipment, but this effect results from an interaction with customer size. First-order dynamic panel data analyses show that the impact of targeted marketing expenses on customer dollar profit is positive for large customers, but there is no effect for smaller customers. Thus, targeted marketing expenses seem to be a tool for relationship maintenance rather than customer development: they help in retaining large customers that generate more profit, but they do not seem to work in developing new customers into larger, more profitable ones.     

Fighting churn with rate plan right-sizing: a customer retention strategy for the wireless telecommunications industry

Prior literature suggests that wireless customers have difficulty in predicting their usage requirements and they often subscribe to rate plans that are not financially optimized. However, the benefits of having wireless customers on optimal rate plans are relatively unknown due to limited research in this area. This paper aims to address this knowledge gap and presents a customer retention strategy for the wireless telecommunications industry. The usage and payment records of 1403 Canadian post-paid wireless customers are examined over a 3.7-year study period. Pearson's χ ² test and hazard function graph are used to reveal how customer churn rate is influenced by rate plan suitability. The statistical analysis demonstrates that customers who are using optimal rate plans have lower churn rate than those with non-optimal ones.     

Retaining customers in traditional retail financial services: interviewing 'les responsables'

This paper explores organizational concerns with retaining customers in traditional retailing of financial services. Managers, charged with retaining customers ('les responsables') in banks and building societies, are interviewed seeking their views on how their organizations retain customers. The study finds that there are a number of shared themes in the sample of informants, which are evolution/flux, customer information systems, a product/sales orientation, delivering financial services, staff and relationships with customers. Underlying these themes, however, appears some equivocation as these organizations try to retain customers when customer acquisition seems to be the thrust of their marketing.     

The influence of customer loyalty on small island economies: an empirical and exploratory study

There is growing consensus that companies' long-term success is reliant on building and sustaining strong customer relationships. This study explores the antecedents of loyalty in business to business (B2Bs) using Guernsey's telecommunication industry as a case study. It examines how these influence customer loyalty orientation and factors that help service providers improve loyalty rates. Extant literature pays little attention to the antecedents of loyalty in small island economies. Prior research focuses on cultural, environmental and macro-economic issues. Drawing on Dick and Basu's (Customer loyalty: Toward an integrated conceptual framework. Journal of the Academy of Marketing Science, 22(Spring), 99–113, 1994) loyalty model, this research explores loyalty antecedents that are cognisant of distinct market conditions that can impact customer loyalty within the telecommunications sector of a small island economy. It seeks to advance understanding of loyalty in B2B relationships in this context and identify factors that contribute towards converting passively loyal customers to being actively loyal customers.     

A predictive investigation of first-time customer retention in online reservation services

This paper reports a predictive investigation of first-time customer retention in an emerging service business—online reservation services. We work with an online platform that enables customers to make reservations for various types of restaurants. With numerous first-time users on the platform, the focal company is eager to effectively identify recurring customers. However, the business problem is challenging due to that each first-time customer has one and only one booking record hinders the use of well-established marketing models that demand multiple booking records for a customer. By analyzing more than 100,000 observations, we extract booking-related features that are useful in predicting first-time customer retention. Our feature extraction is potentially applicable to other service sectors (e.g., hotel, travel) with similar booking information fields (e.g., reservation timing, party size). We further conduct a comparative study in which surprisingly, the seemingly simplistic generalized additive model (GAM) for our test cases consistently outperforms computationally intensive ensemble learning methods, even the cutting-edge XGBoost. Our analysis indicates that there is no silver bullet for applied predictive modeling and GAM should definitely be included in the arsenal of business researchers. We conclude by discussing the implications of our study for online service providers and business data analytics.     

The importance of customer satisfaction in explaining brand and dealer loyalty

The positive influence of customer satisfaction on brand and dealer loyalty is often taken for granted. In this study we attempted to prove whether this relationship really exists. In order to do so we examined the case of an automobile‐dealer network. Three different types of customer satisfaction were distinguished: (a) satisfaction with the car; (b) satisfaction with the sales service and (c) satisfaction with the after‐sales service. It was expected that all three types of satisfaction would have an influence on brand loyalty as well as on dealer loyalty. More specifically, it was expected that satisfaction with the car would be the major determinant of brand loyalty and that satisfaction with the service (both sales‐ and after‐sales service) would be the major determinant of dealer loyalty. Furthermore, a study of the literature revealed that dealer loyalty might also significantly affect brand loyalty.

In the empirical part of the study, customers (n = 416) of different automobile‐dealers of the same brand were asked to fill in a mailed questionnaire. The three different types of customer satisfaction and the intention to buy the same brand of car again, as well as the intention to buy from the same dealer again were measured. The customers were also asked why they would buy the same brand (again) or from the same dealer. In general, the analyses of the results revealed that: customer satisfaction with the car, as well as dealer loyalty are major determinants of brand loyalty; customer satisfaction with the sales service as well as with the after‐sales service are major determinants of dealer loyalty and dealer loyalty is an intervening variable in the relation between satisfaction and brand loyalty. Furthermore, it was found that the strength of the relationship between different types of satisfaction and loyalty indicators differs markedly between various market segments (private/business use of car and new/used car buyers). Several marketing implications are presented. A distinction may be made between the implications for the manufacturer of the physical product and the automobile dealer rendering the service.     

Benchmarking Services Branding Practices

The results of research into the competitiveness of New Zealand firms that provide professional and other business services suggest that effective branding is a key source of success. Brand strength appears to be linked to four main practices: investing in marketing communications to improve customer awareness and understanding of corporate and product brand values; contributing to the wider community to improve corporate reputation; improving internal communications (internal marketing) so front-line and professional staff are kept better informed about customer needs, market changes and company initiatives, thereby enabling staff to help customers better; and improving service quality to improve market positioning. The paper answers calls for the development of an integrated theory of services branding and concludes by positing three main conditions for effective services strategies and practices.     

Product bundling strategies in Swedish markets: links to business orientation and perceived effects on consumer influence

Product bundling is an increasingly important marketing strategy within many industries, and consumer influence on companies' ranges of product bundles is, thus, becoming an important issue. The aim of this study was to investigate product bundling strategies consumers are exposed to by some selected companies in the Swedish automobile, travel and banking industries. Bundling strategies were considered in relation to business orientation as well as the consumer's potential to influence the product bundles offered by these companies. Fourteen qualitative telephone interviews were conducted with senior representatives from the three sectors. Interview respondents were selected in cooperation with their respective companies. Results underwent interpretative analysis, and the findings indicated that business orientation is linked to product bundling techniques and to the type of customer influence on product bundling. Consumers were exposed to mixed and complementary bundling strategies, and customers of companies that apply a market orientation were found to have greater opportunities to influence product bundles directly, whereas companies that apply a production‐oriented approach were less able to respond to their customers' wishes. Consumer influence on the product bundles of production‐oriented companies was found to be of a more indirect nature.     

Customer Relationship Management of the Information Education Services Industry in Taiwan: Attributes,Benefits and Relationship

Measuring the key attributes of the services provided is necessary, but it is not sufficient for the improvement of customer satisfaction. This study develops and empirically tests a model examining the relations among attributes, benefits, customer satisfaction, trust, commitment, and customer behavioural loyalty, as relationship duration and product involvement are used as controllable variables in a marketing system. Based on samples collected from PC School, one of the most renowned information education services in Taiwan, the results show that relationship duration does have a positive influence on customer behavioural loyalty, and product involvement has positive effects on customer satisfaction. The findings also suggest that customers purchase information education services with specific benefits, all of which come with corresponding attributes, and hence result in dissimilar levels of customer satisfaction and homologous behavioural sequences.     

Relational benefits,their consequences,and customer membership types

The purpose of this research is to develop and test a theoretical model in which customer satisfaction mediates the relationship between a firm's relational benefits efforts (i.e. psychological, social, and special treatment benefits) and customer voluntary performance behaviors. Through a review of literature, a conceptual model was developed and then tested utilizing data collected from 522 hotel restaurant patrons. The results indicated that customer relational benefits influence customer voluntary behaviors, the impact of which is mediated by customer satisfaction. More importantly, it was found that the relationships among relational benefits, customer satisfaction, and customer voluntary performance differ depending on whether the surveyed customers had paid or free memberships with the companies in question. The managerial implications of these findings are discussed in the latter part of this article.     

Relationship Marketing and Customer Loyalty in a Retail Setting: A Dyadic Exploration

Customer loyalty is increasingly seen to be crucial to the success of business organisations, with the growing realisation that attracting new customers is far more expensive than retaining existing ones. It has been suggested that a way of increasing customer retention is through secure relationships between buyers and sellers. Surprisingly, however, and despite the growing body of literature on relationship marketing issues, little empirical research has been conducted on the link between relationship marketing and customer loyalty in a retailing context. This paper attempts to address this gap by presenting and testing a conceptual model of the process by which the implementation of relationship marketing can enhance such loyalty. A dyadic exploratory study of clothing store managers and their customers was conducted. Findings reveal that customers' perceptions of clothing stores' relationship marketing efforts are crucial to enhanced commitment and loyalty. Implications are drawn from these results, and future research directions are discussed.     

A novel framework for customer complaint management

Complaining is one option available to customers to express their dissatisfaction with inadequate services. Their complaints contain valuable information for service providers to improve customer relationships and operational quality, which can ultimately enhance business profitability. Customer complaints are frequently handled at the individual level, however, which addresses the symptoms rather than the causes of customer dissatisfaction. This paper presents a framework integrating a decision tree approach, a common data mining tool, into Six Sigma methodology to analyze customer complaints in aggregate and improve service quality by identifying and addressing the underlying causes of failed service. A case study of a restaurant chain was used to demonstrate the effectiveness of the proposed framework. The results indicated a significant (60%) decrease in the number of customer complaints received. Subsequent long-term benefits can be expected.     

Tradeoffs in Supplier Attribute Ratings in Supplier Selection across Strategic versus Non-Strategic Purchases

ABSTRACT

Purpose: This research identifies a customer perspective that is often ignored, neglected, or undervalued in B-to-B sales – the nature of the product itself. The pivot point is whether the product/service desired is strategic (critical to the company’s mission) or non-strategic (not critical to the company’s mission).

Methodology/Approach: A conjoint analysis was conducted for both types of purchases (strategic and non-strategic), assessing the tradeoffs and espoused preferences of four key attributes involving both the supplier and the product across three performance levels – (1) stability of the supplier, (2) reliability, (3) competitive pricing and (4) product quality.

Findings: The results indicate that B-to-B customers do make tradeoffs between suppliers based on stability, reliability, pricing and product quality. The direction of the tradeoffs depends on whether the purchase is a strategic or non-strategic acquisition. The results suggest that suppliers would benefit from understanding the relationship of their products and services to the B-to-B customer’s mission when the supplier is deciding how to improve performance.

Research implications: Too often there is a disconnect between B-to-B salespeople and their customers resulting in suppliers failing to reach performance goals. The research focuses on the importance of B-to-B salespeople uncovering whether or not the customer considers the nature of the product being considered as strategic or non-strategic to their business. The research helps to explain some of the mixed findings in the supplier selection literature.

Practical implications: The research points to the fact that customers analyze and make decisions differently depending on the type of product. Additionally, the research highlights the importance to customers of understanding the potential legal and financial risk of suppliers. This is important in that traditionally suppliers tend to focus on product features and benefits in their selling efforts. These results indicate that they should spend significant time discussing factors that illustrate legal and financial risk reduction to the customer of dealing with their companies.

Originality/Value/Contribution: The study offers a new look at an age-old problem of enhancing sales performance through a new lens by considering the nature of the product (strategic versus non-strategic) through the perspective of the customer. The findings help to explain the mixed results of previous research. To date, the nature of the product and tradeoffs of attributes that customers are willing to make depending on that product classification have not been the focus, though the results suggest that understanding customer decision-making through this lens may enhance supplier success.     

Is innovation in pricing your next source of competitive advantage?

Few companies treat innovation in pricing as seriously as product innovation or business model innovation. However, after interviews with 50 executives and the analysis of pricing practices of 70 companies worldwide, our research suggests that innovation in pricing may be a company's most powerful—and, in many cases, least explored—source of competitive advantage. Innovation in pricing brings new-to-the-industry approaches to pricing strategies, to pricing tactics, and to the organization of pricing with the objective of increasing customer satisfaction and company profits; too many companies today see pricing as a win/lose proposition between themselves and their customers. Innovation in pricing breaks this deadlock and shows how to increase profits and customer satisfaction conjointly. As a result of our research, we present a canvas laying out more than 20 possible avenues for innovation in pricing, offering to any organization—regardless of size, industry, or nationality—a few key ideas on how to increase both profits and customer satisfaction.     

Evidence Supporting the Importance of Brands in Marketing Computer Products

ABSTRACT

For convenience store (c-store) management to be truly customer-focused, they must listen to their customers and provide the products that meet customers' needs. This study investigates one aspect of c-store customer satisfaction, the product mix. The purpose of this paper is to investigate c-store customers' perceptions of product offerings to expand the c-store's product mix and in turn increase customer satisfaction. Fourteen products were examined. Of the fourteen, three were rated very likely to be purchased: postal services, home style meals, and a salad bar. Differences in preference were found between gender and marital status. Men and single customers had higher purchase intentions for the home style meals than women and married customers. Suggestions for future research are provided.     

Customer demotion in hierarchical loyalty programmes

Hierarchical loyalty programmes are popular in many service industries, as a means to tie customers to the company and improve customer relationships. In these programmes, customers obtain more benefits if they spent more but are demoted if they spent less. This study focuses on demotion and suggests that customer demotion can have an asymmetrical negative effect on customers' trust, commitment, and loyalty. The effect appears strongest for demoted customers with an external locus of causality. An experimental study also shows that customer loyalty is lower for demoted customers than for customers who were never elevated.     

Research on the influence of after-sales service quality factors on customer satisfaction

Determining customer satisfaction elements in retailing after-sales services have been well explored; however, the increasing competition in this area demands the investigation of actual instrumentality of these elements on satisfaction of customers. In the present research, we have proposed a framework for assessing the instrumentality of after-sales services on customer satisfaction. Kano model and SERVQUAL framework were used to categorize customer satisfaction elements. In addition, in order to address behavioral dissimilarities among customers, RFM clustering technique was used for analysing 243,180 customers of automobile after-sales services. Accordingly, dissatisfaction decrement index and satisfaction increment index were measured for every cluster separately. We identified a group of 21 quality elements and demonstrated the instrumentality and quality of these quality elements on customer satisfaction. RFM clustering technique is applied to address customer dissimilarities and we demonstrated the preferences and desires of customers in each cluster. While some papers have already identified the influential factors of after-sales services on customer satisfaction, this is for the first time that the instrumentality of after-sales services is being identified. Accordingly, this study demonstrates how different after-sales services quality elements affect customer satisfaction. Therefore, the results of this study can help companies to allocate their resources more efficiently.     

Managing Complaints to Improve Customer Profitability

In this study, the authors aim to understand whether, to what extent, and under what circumstances, organizational responses to customer complaints improve customer profitability. To do so, they build upon the congruence approach and propose a contingency framework in which the effectiveness of three organizational responses to customer complaints (timeliness, compensation and communications) in improving customer profitability is contingent upon the strength of the relationship and the type of failure. The framework is tested empirically in the financial services industry applying latent class techniques to longitudinal data for a sample of complaining customers. The results reveal that: (1) different complaint-handling initiatives affect customer profitability differently for each of the four segments of complaining customers that are obtained; (2) these heterogeneous responses to complaint handling are explained by differences in the orientation of the relationship and in the failure context; and (3) complaint-handling initiatives are more (less) effective at improving customer profitability when the benefits they offer strongly (poorly) match the benefits sought by customers in each segment to recover from the failure. These results contribute to a better theoretical understanding of customers’ heterogeneous responses to complaint handling and offer managerial recommendations to allocate marketing resources across alternative complaint-handling strategies to improve profitability.