Better or Worse? Effects of online promotion habits on customer value: An empirical study

Online frequent and uninterrupted price discounts easily cause customers to form general tendencies to purchase promotions, or ‘online promotion habits’. Compared with offline promotion shopping, the distinct features of online promotion shopping make customer behaviours highly changeable and leave the effects of online promotion habits on customer value a puzzle. Using a dataset of real transactions from a leading online apparel retailer in China, this study makes continuous observations of customers’ online promotion habits. Drawing on the behavioural learning theory, we empirically investigate the dynamic effects of online promotion habits on customer value. The results reveal that after customers form online promotion habits, their customer value increases significantly. Furthermore, among customers with online promotion habits, online promotion habits exert an inverted U-shaped effect on customer value. Namely, as online promotion habits strengthen, customer value increases accordingly, yet negative outcomes show if online promotion habits exceed a certain level. We discuss the theoretical and managerial implications of our findings, which will enable researchers and practitioners to measure and dynamically manage customers’ online promotion habits.     

Examining consumer experience in using m-banking apps: A study of its antecedents and outcomes

The purpose of this study is to examine the antecedents and outcomes of consumer experience (CX) with mobile banking (m-banking) apps. To understand the linkage of CX with other constructs, data collection was done using a structured questionnaire through an online survey. A sample of 473 respondents were analysed using structural equation modeling by testing the proposed hypotheses in AMOS (Analysis of Moment Structures) version 22.0. The findings revealed that convenience, trust, and social influence play a significant role in enhancing CX with the m-banking app use. Apps attributes was found to be relatively less important and no relationship was found between customer support and CX. Customer loyalty and customer intention to continue using the m-banking apps were observed as significant outcome variables. This study will contribute to the growing literature on CX and will guide managers in recognizing the importance of CX in designing appropriate strategies for the promotion of m-banking and engaging their customers in a developing country context.     

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.     

Modelling and Investigating the relationship of after sales service quality with customer satisfaction,retention and loyalty – A case study of home appliances business

After sales services (ASS) are activities that take place after the purchase of the product by customers and are devoted to supporting customers in the use and disposal of goods. ASS can create sustainable relationships with customers and contribute significantly to customer satisfaction. The purpose of this study is to evaluate the ASS quality by measuring the level of customer satisfaction (CS), customer retention (CR) and customer loyalty (CL) through the SERVQUAL dimensions comprising of ASS attributes and also to check which such ASS-based dimensions of SERVQUAL needs to be focused more on improving the quality of ASS with the consideration of firms involved in manufacturing the home appliances. For this purpose research models were proposed to examine the influence of ASS attributes on CS, CR and CL for three different products such as Gas Stove, Water Purifier and Mixer Grinder from the home appliances sector and tested by multiple regression analyses on data collected through the structured survey questionnaire, with a five-point Likert scale. The study has demonstrated the application of multiple regression analysis in studying the influence of ASS attributes on CS, CR and CL, and the results of the study have helped in analysing the performance of the case companies so as to devise suitable strategies in improving CS, CR and CL.     

Managing your most loyal customer relationships

Conventional wisdom regarding customer relationships suggests that a company should strive to deepen the loyalty of its customer base. While multiple approaches have been suggested, each approach advocates moving a subset of the customer base from one level of affinity (e.g., neither satisfied nor dissatisfied) to a higher one (e.g., satisfied). While seemingly appropriate, this approach assumes that moving customers up to higher categories is important and should be the focus of a firm’s efforts. Instead, we recommend an approach that involves focusing a firm’s resources disproportionately on its most satisfied customers. This approach provides two major benefits relative to conventional approaches. First, it focuses a firm’s resources on a narrow segment of customers. Hence, it requires significantly less financial outlay and associated financial risk than any approach that is aimed at all or even a majority of customers. Second, as we demonstrate, the financial benefit from leveraging high satisfaction levels among a subset of the current customer base significantly exceeds the financial benefit of other strategies (e.g., moving customers up from neutral to satisfied). We present the results from two case studies that illustrate our main points and provide useful examples of how to leverage a firm’s highly satisfied customers.     

The influence of satisfaction on customer retention in mobile phone market

This study examines the determinants of customer satisfaction and customer loyalty in the Peruvian mobile phone market. Based in a survey to 1259 customers, Multinomial Logit and GSEM estimations show how determinants of customer satisfaction can be assessed when satisfaction is measured through ordered categorical data. The results confirm that in mobile phone market Customer Satisfaction influences strongly on Customer Loyalty, and in turn Loyalty is an important determinant of Customer Retention. In contrast with previous literature, this study identified the differentiated influence of diverse factors on positive and negative customer satisfaction categories. Indeed while results show that quality of service assessments made by customers had a significant impact on both negative and positive customer satisfaction categories; assessments of other service attributes like customer care, information on tariffs and plans and billing clarity, only showed a significant statistical influence on positive categories of customer satisfaction. Similar asymmetrical results were found with regard to other economic, socioeconomic and geographical determinants of customer decisions. As well, an analog effect is also observed in the relationship between customer satisfaction and loyalty, where only positive satisfaction assessments helps to explain the loyalty of users. Finally, results show that while satisfaction can be identified as a powerful cause of CR, switching barriers did not deter more demanding customers to switch to alternative carriers, suggesting that recent pro-competition regulatory reforms implemented in Peru contributed to reduce these barriers to competition in mobile markets.     

Designing a customer retention plan

What is your company's customer retention rate? How many customers are price defectors? Have you identified barriers that prevent customers from switching to a competitor? In this article, the author outlines a game plan to increase customer retention.     

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.     

Exploring the involvement-patronage link in the phygital retail experiences

Phygital retail experiences connect physical and digital worlds together to create unique experiences among customers. Despite the widespread uses and applications of phygital retailing, the involvement-patronage link remains unexplored. This paper thus aims to make up this gap by examining the effects of customer involvement on their patronage intentions in the phygital retail context. More specifically, building on the social exchange theory, this paper mainly addresses the effects of five dimensions of involvement on customer engagement; and the influence of customer engagement on their patronage intentions in the phygital retailing. The role of customer innovativeness as a boundary condition is also explored. Data were collected from 237 customers who experienced phygital retail stores and analyzed through structural equation modeling. The results show that five facets of involvement (i.e., risk importance, risk probability, sign, interest, and pleasure) affect customer engagement, which eventually affects customers’ patronage intentions of phygital products. This study further identifies that the effects of each dimension of involvement on customer engagement are higher (lower) among the customers with high (low) innovativeness. The findings of the study offer significant theoretical and managerial implications.     

Loyalty Formation for Different Customer Journey Segments

The proliferation of new touchpoints empowers today’s customers to design their own journey from search to purchase. To address this new complexity, we segment customers by their use of specific touchpoints in the customer journey, investigate the association of several covariates with segment membership, consider the rise of mobile devices as potential “game changers” of existing segments, and explore how the relationships among product satisfaction, journey satisfaction, customer inspiration, and customer loyalty differ across segments. Based on anticipated utility theory and using latent class analyses on large-scale data from two samples of 2,443 and 2,649 journeys, we identify five time-consistent segments―store-focused shoppers, pragmatic online shoppers, extensive online shoppers, multiple touchpoint shoppers, and online-to-offline shoppers―that differ considerably in their touchpoint and mobile device usage, their segment-specific covariates, and their search and purchase patterns. The five segments remain unchanged in the two data sets even though the usage of mobile devices has increased substantially. Furthermore, we find that the relationships between various loyalty antecedents and customer loyalty differ between the segments. The insights from this paper help retailers develop segment-specific customer journey strategies.     

The moderating effects of customer driven complexity on the structure and growth relationship in young firms

Close exchange relationships with customers are recognized as important for young firms. In fact, close partnerships with customers provide many advantages, such as innovation, opportunity recognition, reputation, etc. The current paper argues that customers with their close exchange relationships create significant complexities for young firms that require effective structural response. Based on past work on customer driven complexity, four parameters of customer driven complexities were conceptualized: customer variability, customer opportunism, customer-interaction variability, and customer-interaction specificity. Using both archival and survey data from 134 young (6 year old or younger) firms, this study tests the moderating influences of customer driven complexity variables on the relationship between structure and growth of young firms. Findings support the suggestion that more formalization and less delegation of authority at the customer interface significantly contribute to the growth in young firms. However, the positive relationship between formalization and revenue growth is found to be weaker when young firms face a higher level of customer variability and stronger when firms face a higher level of customer opportunism. Similarly, the negative relationship between delegation of authority and revenue growth is weaker when these firms face either a higher level of customer-interaction variability or a higher level of customer-interaction specificity.     

Measuring and improving customer retention at authorised automobile workshops after free services

Customer retention is vital for businesses with much research literature now available. But nothing has been investigated regarding measuring and improving customer retention at authorised automobile workshops after free services. Even after providing extensive warranties and other free service benefits, customers don't use authorised workshops although their vehicles are still under warranty. By not arranging regular maintenance services, customers lose warranty benefits, with product performance and safety related awareness undermined; companies lose huge business potential. Therefore, this study aims to measure and improve customer retention at authorised automobile workshops after free services. To achieve this, a four-phased study has been conducted. In phase one, a combination of a literature review and expert opinions is used to identify customers' retention factors. The second and third phases describe how data is collected from industry experts and customers. Analytical Hierarchy Process (AHP) and Decision Making Trial & Evaluation Laboratory (DEMATEL) are used to prioritise and examine inter-relationships among factors. In the last phase, the study recommends three business strategies to help a company to improve customer retention and make their Annual Maintenance Contract (AMC) product more customer friendly.     

Chatbots and service failure: When does it lead to customer aggression

Artificial intelligence technology is changing the way services are delivered and introducing opportunities for new sources of service failure. The purpose of this paper is to examine how customers might respond (emotion- or problem-focused coping) to service failure of a chatbot when there is an option to interact with a human employee. Using data from 145 participants, we found that in a chatbot service failure context, telling a customer late in the service interaction that a human employee is available to help leads customers to engage in emotion-focused coping, resulting in customer aggression. The positive relationship between late disclosure and emotion-focused coping occurs with those who perceive low customer participation whereby they do not believe they are overly involved in co-producing and co-delivering the service. This research demonstrates how chatbot service failure in a service encounter can produce different effects on customers’ intention to engage in aggression.     

Effect of social support on customer satisfaction and citizenship behavior in online brand communities: The moderating role of support source

Customers often join online brand communities to seek support from others when they encounter product problems. Some customers who receive good social support exhibit customer citizenship behavior. This study develops a theoretical model to investigate how social support influences customer citizenship behavior through customer satisfaction with firms in online brand communities. Moreover, the moderating role of support source (i.e., firms vs. other customers) is measured. The research model is tested by using the Partial Least Squares technique. The results show that informational and emotional support significantly affects the customer citizenship behavior of providing feedback to the firm, recommendations, and helping other customers through customer satisfaction in online brand communities. Moreover, informational and emotional support from firms and other customers exert different effects on customer satisfaction.     

Customers’ service-related engagement,experience, and behavioral intent: Moderating role of age

Though customer engagement (CE) and experience are important research priorities, empirically derived insight into these concepts and their associations remains scarce. We therefore investigate the impact of CE on experience and behavioral intent, which we explore in the tourism context. We also envisage customer age to moderate the proposed associations, thereby further contributing to the CE literature. To investigate these issues, we collected data from key tourism-sites in Jammu/Kashmir, Northern India. Using structural equational modeling, we find that CE dimensions exert differential effects on customer experience. The findings also reveal a stronger, significant effect of younger customers' (up to 39) cognitive engagement on experience, whereas a negligible effect is attained for older customers. While the paths from affective/behavioral engagement to experience are significant across all age groups, the association's strength rises with customer age. Moreover, the effect of customer experience on behavioral intention intensifies as customers get older. We conclude by outlining key implications that arise from our analyses, followed by avenues for further research.     

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.     

The effect of employees' politeness strategy and customer membership on customers' perception of co-recovery and online post-recovery satisfaction

Customer participation is crucial for online service providers to gain and maintain competitive advantages through service recovery. Focusing on the interactive nature of customer participation, this study explored the relationships among employees' politeness strategies, customer membership, perceived co-recovery, and online post-recovery satisfaction. We found that perceived co-recovery was significant for online post-recovery satisfaction. Compared to non-members costumers, members' perceived co-recovery was more positive. Finally, member customers preferred employees to adopt positive politeness strategies, whereas non-member customers preferred negative ones. This study provides valuable suggestions for online service providers to improve online recovery performance.     

Non-normal simultaneous regression models for customer linkage analysis

Simultaneous systems of equations with non-normal errors are developed to study the relationship between customer and employee satisfaction. Customers interact with many employees, and employees serve many customers, such that a one-to-one mapping between customers and employees is not possible. Analysis proceeds by relating, or linking, distribution percentiles among variables. Such analysis is commonly encountered in marketing when data are from independently collected samples. We demonstrate our model in the context of retail banking, where drivers of customer and employee satisfaction are shown to be percentile-dependent.      

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 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.