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John E. Hogan

Bio: John E. Hogan is an academic researcher from Boston College. The author has contributed to research in topics: Customer lifetime value & Customer retention. The author has an hindex of 7, co-authored 7 publications receiving 1153 citations.

Papers
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01 Jan 2001
TL;DR: In this paper, the authors show how a certain type of simulations that is based on complex systems studies (in this case stochastic cellular automata) may be used to generalize diffusion theory one of the fundamental theories of new product marketing.
Abstract: Aggregate level simulation procedures have been used in many areas of marketing. In this paper we show how individual level simulations may be used support marketing theory development. More specifically, we show how a certain type of simulations that is based on complex systems studies (in this case Stochastic Cellular Automata) may be used to generalize diffusion theory one of the fundamental theories of new product marketing. Cellular Automata models are simulations of global consequences, based on local interactions between individual members of a population, that are widely used in complex system analysis across disciplines. In this study we demonstrate how the Cellular Automata approach can help untangle complex marketing research problems. Specifically, we address two major issues facing current theory of innovation diffusion: The first is general lack of data at the individual level, while the second is the resultant inability of marketing researchers to empirically validate the main assumptions used in the aggregate models of innovation diffusion. Using a computer-based Cellular Automata Diffusion Simulation, we demonstrate how such problems can be overcome. More specifically, we show that relaxing the commonly used assumption of homogeneity in the consumers’ communication behavior is not a barrier to aggregate modeling. Thus we show that notwithstanding some exceptions, the well-known Bass model performs well on aggregate data when the assumption that that all adopters have a possible equal effect on all other potential adopters is relaxed. Through Cellular Automata we are better able to understand how individual level assumptions influence aggregate level parameter values, and learn the strengths and limitations of the aggregate level analysis. We believe that this study can serve as a demonstration towards a much wider use of Cellular Automata models for complex marketing research phenomena.

295 citations

Journal ArticleDOI
TL;DR: In this paper, the authors present an overview of a new approach to marketing that seeks to maximize customer equity by managing the customer asset using a resource-based view, and provide a framewo...
Abstract: The authors present an overview of a new approach to marketing—one that seeks to maximize customer equity by managing the customer asset. Using a resource-based view, the article provides a framewo...

252 citations

Journal ArticleDOI
TL;DR: In this article, the authors demonstrate how a customer lifetime value approach can provide a better assessment of advertising effectiveness that takes into account postpurchase behaviors such as word-of-mouth, and demonstrate how firms may be underestimating advertising effectiveness by ignoring such effects.
Abstract: In this article the authors demonstrate how a customer lifetime value approach can provide a better assessment of advertising effectiveness that takes into account postpurchase behaviors such as word-of-mouth. Although for many advertisers word-of-mouth is viewed as an alternative to advertising, the authors show that it is possible to quantify the way in which word-of-mouth often complements and extends the effects of advertising. The authors provide a simple approach to the measurement of postpurchase word-of-mouth sales effects and demonstrate how firms may be underestimating advertising effectiveness by ignoring such effects. Their approach illustrates how customer lifetime value models can provide an important tool to assess the long-term effects of advertising campaigns.

218 citations

Journal ArticleDOI
TL;DR: In this paper, the authors argue that the basic customer lifetime value (CLV) model represents a useful foundation from which to begin to fill the gap between marketing actions and shareholder value, but much work remains to be done before appropriate models can be developed that reflect the true value of a customer to the firm.
Abstract: As more firms adopt a customer asset management approach to their business, it has become increasingly important to understand how customer management efforts relate to the financial performance of the firm. Of specific interest to shareholders is the relationship between traditional financial measures and customer-centric measures. The customer-centric measure that has received the most attention is customer lifetime value (CLV). In this article, the authors argue that the basic CLV model represents a useful foundation from which to begin to fill the gap between marketing actions and shareholder value. However, much work remains to be done before appropriate models can be developed that reflect the true value of a customer to the firm. Specifically, this article elaborates on how factors such as risk associated with customer behavior dynamics, social and competitive effects, and the effect of the product life cycle can be incorporated into the basic CLV model.

215 citations

Journal ArticleDOI
TL;DR: In this paper, the authors developed and tested six hypotheses related to hybrid channel conflict and found that channel conflict is an important determinant of both channel performance and satisfaction, and that the relationship between channel conflicts and channel performance is moderated by the lifecycle stage.
Abstract: Today’s dynamic markets are forcing firms to design increasingly complex channel strategies involving multiple channels of distribution. As the complexity of these systems increases, so too does the opportunity for conflict between individual channel coalitions within the firm. Whereas this hybrid channel conflict can reduce channel performance, it can also serve as a mechanism forcing internal channel coalitions to work harder and smarter to serve their markets. In this paper, we develop and test six hypotheses related to hybrid channel conflict. The findings indicate that hybrid channel conflict is an important determinant of both channel performance and satisfaction. The results suggest further that the relationship between hybrid channel conflict and channel performance is moderated by the lifecycle stage. Moreover, our data support the view that the frequency of conflict, but not its intensity, has a negative effect on channel system performance. We conclude with a discussion of the theoretical and managerial implications of this study.

112 citations


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Proceedings ArticleDOI
24 Aug 2003
TL;DR: An analysis framework based on submodular functions shows that a natural greedy strategy obtains a solution that is provably within 63% of optimal for several classes of models, and suggests a general approach for reasoning about the performance guarantees of algorithms for these types of influence problems in social networks.
Abstract: Models for the processes by which ideas and influence propagate through a social network have been studied in a number of domains, including the diffusion of medical and technological innovations, the sudden and widespread adoption of various strategies in game-theoretic settings, and the effects of "word of mouth" in the promotion of new products. Recently, motivated by the design of viral marketing strategies, Domingos and Richardson posed a fundamental algorithmic problem for such social network processes: if we can try to convince a subset of individuals to adopt a new product or innovation, and the goal is to trigger a large cascade of further adoptions, which set of individuals should we target?We consider this problem in several of the most widely studied models in social network analysis. The optimization problem of selecting the most influential nodes is NP-hard here, and we provide the first provable approximation guarantees for efficient algorithms. Using an analysis framework based on submodular functions, we show that a natural greedy strategy obtains a solution that is provably within 63% of optimal for several classes of models; our framework suggests a general approach for reasoning about the performance guarantees of algorithms for these types of influence problems in social networks.We also provide computational experiments on large collaboration networks, showing that in addition to their provable guarantees, our approximation algorithms significantly out-perform node-selection heuristics based on the well-studied notions of degree centrality and distance centrality from the field of social networks.

5,887 citations

Journal ArticleDOI
TL;DR: In this article, the authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change in a firm's customer equity relative to the incremental expenditure necessary to produce the change.
Abstract: The authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change in a firm’s customer equity relative to the incremental expenditure necessary to produce the change. The change in the firm’s customer equity is the change in its current and future customers’ lifetime values, summed across all customers in the industry. Each customer’s lifetime value results from the frequency of category purchases, average quantity of purchase, and brand-switching patterns combined with the firm’s contribution margin. The brand-switching matrix can be estimated from either longitudinal panel data or cross-sectional survey data, using a logit choice model. Firms can analyze drivers that have the greatest impact, compare the drivers’ performance with that of competitors’ drivers, and project return on investment from improvements in the drivers. To demonstrate how the approach can be implemented in a specific corporate setting and to show the methods used to test and validate the model, the authors illustrate a detailed application of the approach by using data from the airline industry. Their framework enables what-if evaluation of marketing return on investment, which can include such criteria as return on quality, return on advertising, return on loyalty programs, and even return on corporate citizenship, given a particular shift in customer perceptions. This enables the firm to focus marketing efforts on strategic initiatives that generate the greatest return.

1,939 citations

Journal Article
TL;DR: The Social Psychology of Groups as discussed by the authors is a seminal work in the field of family studies, where the authors introduced, defined, and illustrated basic concepts in an effort to explain the simplest of social phenomena, the two-person relationship.
Abstract: The Social Psychology of Groups. J. W Thibaut & H. H. Kelley. New York: alley, 1959. The team of Thibaut and Kelley goes back to 1946 when, after serving in different units of the armed services psychology program, the authors joined the Research Center for Group Dynamics, first at M.LT and then at the University of Michigan. Their continued association eventuated in appointments as fellows at the Center for Advanced Study in the Behavioral Sciences, 19561957. It is during these years that their collaboration resulted in the publication of The Social Psychology of Groups. The book was designed to "bring order and coherence to present-day research in interpersonal relations and group functioning." To accomplish this aim, the authors introduced, defined, and illustrated basic concepts in an effort to explain the simplest of social phenomena, the two-person relationship. These basic principles and concepts were then employed to illuminate larger problems and more complex social relationships and to examine the significance of such concepts as roles, norm, power, group cohesiveness, and status. The lasting legacy of this book is derived from the fact that the concepts and principles discussed therein serve as a foundation for one of the dominant conceptual frameworks in the field of family studies today-the social exchange framework. Specifically, much of our contemporary thinking about the process of interpersonal attraction and about how individuals evaluate their close relationships has been influenced by the theory and concepts introduced in The Social Psychology of Groups. Today, as a result of Thibaut and Kelley, we think of interpersonal attraction as resulting from the unique valence of driving and restraining forces, rewards and costs, subjectively thought to be available from a specific relationship and its competing alternatives. We understand, as well, that relationships are evaluated through complex and subjectively based comparative processes. As a result, when we think about assessing the degree to which individuals are satisfied with their relationships, we take into consideration the fact that individuals differ in terms of the importance they attribute to different aspects of a relationship (e.g., financial security, sexual fulfillment, companionship). We also take into consideration the fact that individuals differ in terms of the levels of rewards and costs that they believe are realistically obtainable and deserved from a relationship. In addition, as a result of Thibaut and Kelley's theoretical focus on the concept of dependence and the interrelationship between attraction and dependence, there has evolved within the field of family studies a deeper appreciation for the complexities and variability found within relationships. Individuals are dependent on their relationships, according to Thibaut and Kelley, when the outcomes derived from the existing relationship exceed those perceived to be available in competing alternatives. Individuals who are highly dependent on their relationships are less likely to act to end their relationships. This dependence and the stability it engenders may or may not be voluntary, depending on the degree to which individuals are attracted to and satisfied with their relationships. When individuals are both attracted to and dependent on their relationships, they can be thought of as voluntarily participating in their relationship. That is, they are likely to commit themselves to the partner and relationship and actively work for its continuance. Thibaut and Kelley termed those relationships characterized by low levels of satisfaction and high levels of dependence "nonvoluntary relationships. …

1,894 citations

Journal ArticleDOI
TL;DR: In this article, the authors developed a conceptual framework for customer relationship management (CRM) that helps broaden the understanding of CRM and its role in enhancing customer value and, as a result, shareholder value.
Abstract: In this article, the authors develop a conceptual framework for customer relationship management (CRM) that helps broaden the understanding of CRM and its role in enhancing customer value and, as a result, shareholder value. The authors explore definitional aspects of CRM, and they identify three alternative perspectives of CRM. The authors emphasize the need for a cross-functional, process-oriented approach that positions CRM at a strategic level. They identify five key cross-functional CRM processes: a strategy development process, a value creation process, a multichannel integration process, an information management process, and a performance assessment process. They develop a new conceptual framework based on these processes and explore the role and function of each element in the framework. The synthesis of the diverse concepts within the literature on CRM and relationship marketing into a single, process-based framework should provide deeper insight into achieving success with CRM strategy...

1,871 citations

Journal ArticleDOI
TL;DR: In this article, the authors examine the received wisdom of services marketing and challenge the validity and continued usefulness of its core paradigm, namely, the assertion that four specific characteristics (i.e.,
Abstract: This article examines the received wisdom of services marketing and challenges the validity and continued usefulness of its core paradigm, namely, the assertion that four specific characteristics—i...

1,282 citations