The effects of customer acquisition and retention orientations on a firm’s radical and incremental innovation performance

The effect of a firm’s strategic focus on acquiring new customers and/or retaining existing customers (customer acquisition and retention orientations) on innovation performance is evaluated. With dyadic primary data collected from 225 strategic business units, the authors demonstrate that a firm’s focus on customer acquisition enhances its radical innovation performance but hinders its incremental innovation; a firm’s strategic orientation toward customer retention has the opposite effects. These effects are mediated by both customer knowledge development and the firm’s resource configuration decisions. In addition, the authors provide insight into the impact of managerial decision trade-offs when implementing customer engagement strategies. The results suggest that the effect of customer acquisition and retention orientations on customer knowledge and investment decisions, and ultimately on innovation performance, is amplified when a firm consistently implements a specific engagement strategy. Implementing a dual strategy by attempting to focus on both acquiring and retaining customers undermines resource configuration decisions, with diverse effects on both radical and incremental innovation.     

Critical service logic: making sense of value creation and co-creation

Because extant literature on the service logic of marketing is dominated by a metaphorical view of value co-creation, the roles of both service providers and customers remain analytically unspecified, without a theoretically sound foundation for value creation or co-creation. This article analyzes value creation and co-creation in service by analytically defining the roles of the customer and the firm, as well as the scope, locus, and nature of value and value creation. Value creation refers to customers’ creation of value-in-use; co-creation is a function of interaction. Both the firm’s and the customer’s actions can be categorized by spheres (provider, joint, customer), and their interactions are either direct or indirect, leading to different forms of value creation and co-creation. This conceptualization of value creation spheres extends knowledge about how value-in-use emerges and how value creation can be managed; it also emphasizes the pivotal role of direct interactions for value co-creation opportunities.     

Unlocking the power of marketing: understanding the links between customer mindset metrics,behavior, and profitability

Recent evidence about the central role played by perceptual constructs in driving performance outcomes has produced a renewed interest in studying customer mindset metrics (CMMs; e.g., satisfaction, service quality, and loyalty intentions). However, we still lack a proper understanding of how (i.e., process) and to what extent (i.e., magnitude) these CMMs ultimately translate into profitability at the customer level. In this study, we integrate CMMs into an individual-level framework of customer behavior and profitability and provide a conceptual understanding of the process through which these metrics influence customer profitability. Specifically, we propose three mechanisms through which CMMs affect customer behavior and profitability: behavioral effect, marketing effectiveness effect, and marketing efficiency effect. We empirically test this framework across two distinct contexts, a B2B high-tech firm and a B2C telecommunications firm. The results demonstrate that these unobservable CMMs have a significant and multi-dimensional impact on customer behavior and customer profitability. Furthermore, we compute the increases in customer behavior and customer profitability that each firm can expect due to increases in CMMs to help firms improve resource allocation and make better decisions about how much (and when) to invest in CMMs.     

Exploring CRM effectiveness: an institutional theory perspective

This study identifies the potential contribution that institutional theory can make to understanding the success of marketing practices. Based on institutional theory, we argue that the effectiveness of marketing practices decreases when firms are motivated to adopt such practices under the influence of institutional pressures originating in firms’ environments. However, alignment between a practice and a firm’s marketing strategy may buffer against these negative effects. We apply these insights to the case of customer relationship management (CRM). CRM is considered an important way to enhance customer loyalty and firm performance, but it has also been criticized for being expensive and for not living up to expectations. Empirical data from 107 organizations confirm that, in general, adopting CRM for mimetic motives is likely to result in fewer customer insights as a result of using this practice. Our study suggests that institutional theory has much to offer to the investigation of the effectiveness of marketing practices.     

B2C网站顾客购物体验与顾客忠诚关系研究——基于整体网络产品的视角

随着互联网发展日益完善,人们逐渐将注意力从产品和服务的质量转移至体验上。文章结合整体网络产品理论,从初始产品用户体验、信息产品用户体验和产品平台用户体验这三个层面来理鳃B2C网站的购物体验。并以顾客忠诚的影响机制为出发点,探讨了体验与忠诚的关系,提出了本研究的模型和假设。通过问卷调查的方法得出了以下结论：（1）B2C网站购物体验对态度忠诚有正向影响;（2）B2C网站购物体验对行为忠诚部分有正向影响;（3）态度忠诚对行为忠诚有显著的正向影响;（4）认知需求在B2C网站购物体验影响态度忠诚、行为忠诚中调节效果不显著。     

Customer engagement: the construct,antecedents, and consequences

In this study, we highlight the need and develop a framework for customer engagement (CE) by reviewing the marketing literature and analyzing popular press articles. By understanding the evolution of customer management, we develop the theory of engagement, arguing that when a relationship is satisfying and has emotional connectedness, the partners become engaged in their concern for each other. As a result, the components of customer engagement include both the direct and the indirect contributions of CE. Based on the theoretical support, our proposed framework elaborates on the components of CE as well as the antecedents (satisfaction and emotion) and consequences (tangible and intangible outcomes) of CE. We also discuss how convenience, nature of the firm (B2B vs. B2C), type of industry (service vs. product), value of the brand (high vs. low), and level of involvement (high vs. low) moderate the link between satisfaction and direct contribution, and between emotions and indirect contribution of CE, respectively. Further, we show how customer engagement can be gained and how firm performance can be maximized by discussing relevant strategies.     

Customer-to-customer exchange: Its MOA antecedents and its impact on value creation and loyalty

Value creation through customer-to-customer exchange occurs when the perceived benefits of a company’s offering are increased as a result of customers’ interaction with one another. C2C exchange exists in a wide variety of service environments, both online and face-to-face. Drawing on the motivation, opportunity, and ability (MOA) framework, this research presents and tests a theoretical model that examines antecedents and outcomes of C2C exchange in the context of face-to-face networking behaviors at professional association meetings. Data were obtained from a survey of conference attendees, and the hypotheses were tested using moderated regression and path analysis. The results show a three-way interaction effect among the MOA factors, that the MOA model does predict the level of C2C exchange, and that C2C exchange does enhance service value perceptions and customer loyalty intentions.     

Fundamental changes in marketing organization: The movement toward a customer-focused organizational structure

There has been growing interest in the future of marketing and changes in marketing’s organization and role within the firm. However, there has not been research that holistically explores key changes in marketing organization. The authors draw on qualitative interviews with 50 managers in the United States and Germany and argue that changes in marketing organization that have been discussed in isolation are part of a more general shift toward customer-focused organizational structures. They initially discuss two specific changes related to the overall shift: changes concerning primary marketing coordinators and increasing dispersion of marketing activities. They then introduce the concept of a customer-focused organizational structure that uses groups of customers as the primary basis for structuring the organization. They identify typical organizational transitions as firms move toward a customer-focused organizational structure and discuss the challenges firms face in making this transition. They conclude with implications for academic research, managerial practice, and business school curriculum. Christian Homburg is a professor of business administration and marketing and Chair of the Marketing Department at the University of Mannheim in Germany. He received his Ph.D. and master’s degrees from the University of Karlsruhe and earned his habilitation at the University of Mainz. His research interests include organizational issues in marketing, customer orientation, industrial marketing, and relationship marketing. Dr. Homburg has consulted and delivered executive education programs for more than one hundred companies, including Daimler-Benz, Siemens, Deutsche Bank, Hoechst, RWE, Thyssen, Krupp-Hoesch and Sodexho. John P. Workman, Jr. is an associate professor of marketing at Creighton University in Omaha, Nebraska. Dr. Workman conducts research on the organization and role of marketing within the firm, on new product development in high-tech firms, and more recently on organizational issues for e-commerce initiatives. His research uses concepts from organization theory, strategy, and sociology to examine the interactions between marketing and other groups in the firm. Dr. Workman has a B.S. from N.C. State University, an M.B.A. from the University of Virginia, and a Ph.D. from M.I.T. He has consulted for a number of organizations on the topics of e-commerce and marketing organization. Ove Jensen is a Ph.D. student studying under Professor Homburg at the University of Mannheim. He received his master’s degree from the WHU Koblenz. He conducts research on sales management, organizational issues in marketing, and incentive systems. He has extensive consulting experience in the areas of market-focused management and sales management.     

Service quality delivery through web sites: A critical review of extant knowledge

Evidence exists that service quality delivery through Web sites is an essential strategy to success, possibly more important than low price and Web presence. To deliver superior service quality, managers of companies with Web presences must first understand how customers perceive and evaluate online customer service. Information on this topic is beginning to emerge from both academic and practitioner sources, but this information has not yet been examined as a whole. The goals of this article are to review and synthesize the literature about service quality delivery through Web sites, describe what is known about the topic, and develop an agenda for needed research. In the offline worl...30% of a company’s resources are spent providing a good customer experience and 70% goes to marketing. But online...70% should be devoted to creating a great customer experience and 30% should be spent on “shouting” about it. Valarie A. Zeithaml is the Roy and Alice Richards Bicentennial Professor and Area Chair at the Kenan-Flagler Business School of the University of North Carolina, Chapel Hill. She obtained an M.B.A. and doctorate from the University of Maryland and has devoted the past 20 years to researching and teaching the topics of service quality and services management. She is the author of three service books:Delivery Quality Service: Balancing Customer Perceptions and Expectations, Driving Customer Equity, andServices Marketing, a textbook now in its second edition. She has won numerous teaching and research awards, including the Ferber Award from theJournal of Consumer Research, the Maynard Award from theJournal of Marketing, the Jagdish Sheth Award from theJournal of the Academy of Marketing Science, and the O’Dell Award from theJournal of Marketing Research. She has consulted with more than 40 service and product companies. A. Parasuraman (D.B.A., Indiana University) is a professor and holder of the James W.McLamore Chair in Marketing at the University of Miami. He has received many distinguished teaching and research awards. In 1988, he was selected as one of the “Ten Most Influential Figures in Quality” by the editorial board ofThe Quality Review. In 1998, he received the American Marketing Association’s “Career Contributions to the Services Discipline Award.” In 2001, he received the Academy of Marketing Science’s “Outstanding Marketing Educator Award.” Dr. Parasuraman has published numerous articles in leading scholarly and managerial journals. He has served as editor of theJournal of the Academy of Marketing Science for a 3-year term (1997–2000). He has authored or coauthored several books, the most recent of which isTechno-Ready Marketing: How and Why Your Customers Adopt Technology (2001). Arvind Malhotra is an assistant professor at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. He has conducted award-winning research on how companies exploit information technology to reinvent themselves for e-business. He teaches e-commerce strategies to executive M.B.A.s and strategic use of information technology to M.B.A. students.     

Customer relationship dynamics: Service quality and customer loyalty in the context of varying levels of customer expertise and switching costs

As customer-organization relationships deepen, consumers increase their expertise in the firm’s product line and industry and develop increased switching costs. This study investigates the effects of customer investment expertise and perceived switching costs on the relationships between technical and functional service quality and customer loyalty. Technical service quality is hypothesized to be a more important determinant of customer loyalty than functional service quality as expertise increases. Both technical and functional service quality are hypothesized to have a reduced relationship with customer loyalty as perceived switching costs increase. Three-way interactions between the main effects of service quality, customer expertise, and perceived switching costs yield additional insight into the change in relative importance of technical and functional service quality in customers’ decision to be loyal. Six of eight hypotheses receive support. Implications are discussed for customer relationship management over the relationship life cycle. Simon J. Bell (s.bell@jims.cam.ac.uk; Ph.D., University of Melbourne) is a university lecturer in marketing at the Judge Institute of Management, the business school of the University of Cambridge. His research has appeared in theJournal of the Academy of Marketing Science, the Journal of Retailing, theJournal of Business Research, Industrial Marketing Management, andMarketing Theory, among others. His.areas of research interest include organizational learning, sales force management and internal marketing, services and relationship marketing, and corporate social responsibility. Seigyoung Auh (sauh@brocku.ca; Ph.D., University of Michigan) is an assistant professor of marketing at Brock University, Ontario, Canada. His research has been published in theJournal of Economic Psychology, theJournal of Business to Business Marketing, theJournal of Services Marketing, theJournal of Marketing Management, Industrial Marketing Management, and others. His research interests are in application of a resource-based view to marketing strategy, top management team diversity and marketing strategy, customer orientation (customer satisfaction) and loyalty, interface between marketing and entrepreneurship, and services and relationship marketing. Karen Smalley (B.Comm. Hons, University of Melbourne) is an honors graduate in marketing at the University of Melbourne.     

Employees as internal audience: how advertising affects employees’ customer focus

Ad campaigns target consumers with information about the company, its products, and sometimes its employees. Ads also reach the organization’s employees and may contain information useful to employees in meeting customer needs. Results from a study involving a high-tech firm indicate that when employees believe ads are effective and value congruent, their customer focus increases. Pride completely mediates the effects of value congruence and effectiveness on customer focus. Organizational identification of employees generally results in a more favorable reaction to ads. A second study involving a regional health facility replicates and extends these findings to include employee portrayal accuracy when employees are featured in ads. Employee portrayal accuracy affects promise accuracy, effectiveness and value-congruence. In addition, employee portrayal accuracy has a direct effect on customer focus.     

How first impressions of a customer impact effectiveness in an initial sales encounter

First impressions of others affect both the content and outcomes of a variety of interpersonal encounters. In sales encounters, a salesperson’s first impressions of a customer provide a starting point for probing customer needs and for adapting to those needs. This implies that salesperson effectiveness in an initial sales encounter is associated— at least in part—with a salesperson’s first impression of the customer. The reported quasi-experiment is the first study to explore empirically the connection between salespeople’s first impressions, their cognitive structures, and sales effectiveness in a single, initial sales encounter. The results provide an intriguing glimpse into the dilemma salespeople face in trying to establish the basis of a relationship while achieving short-term sales outcomes (e.g., closing a sale, satisfaction). Kleine & Associates Symmetrics Kenneth R. Evans received his D.B.A. from the University of Colorado. He has served on the faculty at Arizona State University and currently serves as associate dean and professor of marketing at the University of Missouri, Columbia. He has published articles in theJournal of Marketing, Journal of Personal Selling and Sales Management, Journal of Advertising, Industrial Marketing Management, and inDistinguished Essays in Marketing Theory. Robert E. Kleine, III, received his Ph.D. from the University of Cincinnati and has served on the marketing faculty at Arizona State University. He is presently chief scholar for Kleine & Associates. His work has appeared in theJournal of Consumer Research, Journal of Consumer Psychology, and in other journals. Timothy D. Landry is a doctoral candidate at the University of Missouri, Columbia. He has presented his work at the American Marketing Association’s conferences. Lawrence A. Crosby received his Ph.D. from the University of Michigan. He has served on the marketing faculty at the University of Nebraska and at Arizona State University. He served as managing director of CSM Worldwide, Inc., and is presently chief executive officer of Symmetrics. He has published several articles in theJournal of Marketing, Journal of Consumer Research, and in other journals.     

Relationship marketing of services—growing interest,emerging perspectives

Relationship marketing is an old idea but a new focus now at the forefront of services marketing practice and academic research. The impetus for its development has come from the maturing of services marketing with the emphasis on quality, increased recognition of potential benefits for the firm and the customer, and technological advances. Accelerating interest and active research are extending the concept to incorporate newer, more sophisticated viewpoints. Emerging perspectives explored here include targeting profitable customers, using the strongest possible strategies for customer bonding, marketing to employees and other stakeholders, and building trust as a marketing tool. Although relationship marketing is developing, more research is needed before it reaches maturity. A baker’s dozen of researchable questions suggests some future directions. holds the J. C. Penney Chair of Retailing Studies, is a professor of Marketing, and is director of the Center for Retailing Studies at Texas A&M University. He is a former national president of the American Marketing Association. His research interests are services marketing, service quality, and retailing strategy. He has published numerous journal articles and books, includingDelivering Quality Service: Balancing Customer Perceptions and Expectations (Free Press, 1990),Marketing Services: Competing Through Quality (Free Press, 1991), andOn Great Service: A Framework for Action (Free Press, 1995).     

Market-based capabilities and financial performance of firms: insights into marketing’s contribution to firm value

While there is recognition that market-based capabilities contribute to a firm’s financial performance, the exposition is largely conceptual (Srivastava et al. Journal of Marketing 62:2–18, 1998; Journal of Marketing 63:168–179, 1999). Using a resource based view of the firm, the present study proposes that (1) market-based assets and capabilities of a firm impacts (2) performance in three market-facing business processes (new product development, supply-chain and customer management), which in turn, influence (3) the firm’s financial performance. It develops related hypotheses and tests the framework empirically. The study also examines for the first time the interrelationship among the three business processes and their impact on the market value of firms. Further, the study examines the moderating influence of two organizational variables—size and age of the firm. Overall, the major contribution of the study is that it offers a process linkage between capabilities, process performance and financial performance. The results of this research will provide strategic insights to managers on optimal customer management, product development and supply chain strategies.

Developing a customer value-based theory of the firm

Conclusion Just as it was inappropriate to characterize this as the development of a new theory of the firm, it also is premature to suggest that this commentary articulates a comprehensive customer value-based theory of the firm. The foundation for this theory was laid decades ago, and the ideas presented in this commentary must be more thoroughly developed before it can appropriately deemed a “theory of the firm.” However, as marketers, we should be committed to the proposition that the creation of customer value must be the reason for the firm’s existence and certainly for its success. Thus developing this theory further and testing the propositions that comprise it should be a high priority for marketing scholars. His research is focused on the nature and benefits of a market orientation and of being a learning organization, as well as on issues concerned with developing and implementing a market-focused strategy. His work has been published in theJournal of Marketing, theEuropean Journal of Marketing, theJournal of Strategic Marketing, theInternational Marketing Review, theJournal of Market-Focused Management, andBusiness Horizons, among others.     

The effects of supplier capabilities on industrial customers’ loyalty: the role of dependence

This research examines whether suppliers’ capabilities impact OEM customers’ dependence on the supplier and thereby generate customer loyalty. Using a sample of purchasing managers focusing on a single key component supplier, we examine three supplier capabilities, two dependence dimensions, and three aspects of customer loyalty. Core offering capability increases the customer firm’s benefit-based dependence. Operations capability has a more comprehensive effect, enhancing both benefit-based and cost-based dependence. Benefit-based dependence leads to relational loyalty and, through its effect on relational loyalty, to insensitivity to competitive offerings and future purchase expansion. Cost-based dependence motivates insensitivity to competitive offerings, but does not affect relational loyalty or purchase expansion. The supplier’s communication capability is associated with relational loyalty, but this effect does not flow through the customer firm’s dependence. The divergent pattern of antecedents and effects of benefit-based dependence and cost-based dependence may explain the inconsistent and insignificant research findings in previous research on dependence. Our results suggest that adopting a bi-dimensional model of dependence more fully captures the theoretical domain of dependence, thereby permitting researchers to better examine its role in supply chain, channel, and marketing relationships.     

The chain from customer satisfaction via word-of-mouth referrals to new customer acquisition

It has often been argued that word-of-mouth (WOM) can contribute significantly to a firm’s success in a variety of ways. Here, we analyze the functional linkage between customer satisfaction, WOM, and new customer acquisition. Using data from two empirical studies we conceptualize and test the direct, non-linear, and moderated relationship between satisfaction and WOM. We further explore the circumstances under which WOM leads to new customer acquisition using a logistic regression model. We do so for two groups (new customers and long-term customers) from the customer base of a large energy provider (n = 688), and for a random sample of B2B customers (n = 416) in the same market. Results indicate that the satisfaction-WOM link is non-linear and is moderated by several customer involvement dimensions. Based on our results, we demonstrate how the satisfaction-WOM-new customer acquisition link can enrich return on quality and satisfaction models. Further, we draw conclusions about how companies can make use of both the satisfaction-WOM and the WOM-new customer acquisition link for better allocating their marketing resources.

Gaining and leveraging customer-based competitive intelligence: the pivotal role of social capital and salesperson adaptive selling skills

This study explores the generation and use of competitive intelligence (CI) within the buyer–seller exchange process and its influence on salesperson performance. Using the concept of social capital as a theoretical foundation and multilevel data collected at three time points from 686 customer–salesperson dyads, the authors empirically test a conceptual framework that proposes both antecedents and consequences of CI sharing between customer and salesperson. The results of the study demonstrate that CI sharing by customers is a function of salesperson customer orientation, customer-centric extra-role behaviors, and relationship quality. CI sharing translates into increased perceived value, share-of-wallet, and profit margins when the salesperson utilizes the information to position and differentiate his or her product; however this occurs only when the salesperson has strong adaptive selling skills. Surprisingly, CI negatively influences these outcomes among low-adaptive salespeople, indicating that CI can actually work to a firm’s disadvantage if the salesperson is not equipped to respond to it. These findings suggest that CI must be examined differently than general market knowledge and that firms may leverage CI to their tactical advantage at the salesperson–customer interface if managed effectively.     

A comprehensive model of customer direct and indirect revenge: understanding the effects of perceived greed and customer power

This article develops and tests a comprehensive model of customer revenge that contributes to the literature in three manners. First, we identify the key role played by the customer’s perception of a firm’s greed—that is, an inferred negative motive about a firm’s opportunistic intent—that dangerously energizes customer revenge. Perceived greed is found as the most influential cognition that leads to a customer desire for revenge, even after accounting for well studied cognitions (i.e., fairness and blame) in the service literature. Second, we make a critical distinction between direct and indirect acts of revenge because these sets of behaviors have different repercussions—in “face-to-face” vs. “behind a firm’s back”—that call for different interventions. Third, our extended model specifies the role of customer perceived power in predicting these types of behaviors. We find that power is instrumental—both as main and moderation effects—only in the case of direct acts of revenge (i.e., aggression and vindictive complaining). Power does not influence indirect revenge, however. Our model is tested with two field studies: (1) a study examining online public complaining, and (2) a multi-stage study performed after a service failure.     

Customer response capability in a sense-and-respond era: The role of customer knowledge process

An organization’s customer response capability, its comptence in satisfying customer needs through effective and quick responses, is critical for sustained success. In this article, the authors examine how customer knowledge process influences customer response capability. They highlight two dimensions of customer response capability, customer response expertise and customer response speed. It is observed that apart from its direct positive association with customer response expertise and speed, the customer knowledge process also diminishes the positive association between risk propensity and these dimensions of customer response capability. The influence of customer response expertise and speed on performance is also examined. The hypotheses are tested using survey data collected from a sample of retailing firms and the findings triangulated using qualitative data collected through depth interviews with managers. The results highlight the importance of customer knowledge in enhancing customer response capability. Satish Jayachandran is with the Department of Marketing at the University of South Carolina. His research interests are in the area of marketing strategy, specifically market responsiveness of firms and the impact of organizational performance on subsequent managerial and firm behavior. His research has been published in theJournal of Marketing and theJournal of the Academy of Marketing Science. He was a recipient of the Harold H. Maynard award for 2001 from theJournal of Marketing. Kelly Hewett is with the Department of Marketing at the University of South Carolina. Her research focuses on the management of relationships between buyers and sellers, as well as between headquarters and foreign subsidiaries in managing the marketing function globally. Her research has been published in theJournal of Marketing, theJournal of International Business Studies, theJournal of the Academy of Marketing Science, and theJournal of International Marketing, among others. Peter Kaufman is with the Department of Marketing at Illinois State University. His research focuses on buyer-seller relationships, retailing, and distribution issues. He received an Honorable Mention in the Marketing Science Institute’s 2003 Alden G. Clayton Doctoral Dissertation Proposal Competition.