Showing papers on "Customer relationship management published in 2008"

Customer Channel Migration

Abstract: The authors develop a model of customer channel migration and apply it to a retailer that markets over the Web and through catalogs. The model identifies the key phenomena required to analyze customer migration, shows how these phenomena can be modeled, and develops an approach for estimating the model. The methodology is unique in its ability to accommodate heterogeneous customer responses to a large number of distinct marketing communications in a dynamic context. The results indicate that (1) Web purchasing is associated with lower subsequent purchase volumes than when buying from other outlets; (2) marketing efforts are associated with channel usage and purchase incidence, offsetting negative Web experience effects; and (3) negative interactions occur between like communications (catalog × catalog or e-mail × e-mail) and between different types of communications (catalog × e-mail). The authors find that over the four-year period of their data, a Web-oriented “migration” segment emerged, and t...

Customer betrayal and retaliation: when your best customers become your worst enemies

Abstract: After a service failure and a poor recovery, what leads loyal customers to try to punish a firm even if there is no material gain for doing so? We propose and test a justice-based model that incorporates perceived betrayal as the means to understand customer retaliation and the “love becomes hate” effect. The results suggest that betrayal is a key motivational force that leads customers to restore fairness by all means possible, including retaliation. In contrast to the majority of findings in the service literature, we propose and find that relationship quality has unfavorable effects on a customer’s response to a service recovery. As a relationship gains in strength, a violation of the fairness norm was found to have a stronger effect on the sense of betrayal experienced by customers. The model was tested on a national sample of airline passengers who complained to a consumer agency after an unsuccessful recovery.

Key strategies for the successful involvement of customers in the co‐creation of new technology‐based services

Abstract: Purpose – The aim is to propose a conceptual framework consisting of research propositions concerning the key strategies required for the successful involvement of customers in the co‐creation of new technology‐based services.Design/methodology/approach – The methodology involves a single case study from which data are derived and analyzed using the grounded theory methodology of “constant comparative analysis.” User‐generated ideas for future mobile phone services are collected from four user involvement projects and analyzed at several workshops attended by senior managers from telecommunications firms.Findings – Seven key strategies are identified as being essential for successful user involvement in new product development. Each strategy is described and illustrated in relation to existing theory and presented as a research proposition.Research limitations/implications – The exploratory nature of the research means that the findings are tentative and need to be confirmed in other settings by other res...

Identification of influencers - Measuring influence in customer networks

Abstract: Viral marketing refers to marketing techniques that use social networks to produce increases in brand awareness through self-replicating viral diffusion of messages, analogous to the spread of pathological and computer viruses. The idea has successfully been used by marketers to reach a large number of customers rapidly. If data about the customer network is available, centrality measures provide a structural measure that can be used in decision support systems to select influencers and spread viral marketing campaigns in a customer network. Usage stimulation and churn management are examples of DSS applications, where centrality of customers does play a role. The literature on network theory describes a large number of such centrality measures. A critical question is which of these measures is best to select an initial set of customers for a marketing campaign, in order to achieve a maximum dissemination of messages. In this paper, we present the results of computational experiments based on call data from a telecom company to compare different centrality measures for the diffusion of marketing messages. We found a significant lift when using central customers in message diffusion, but also found differences in the various centrality measures depending on the underlying network topology and diffusion process.

Exploring Customer Loyalty Following Service Recovery: The Mediating Effects of Trust and Emotions

Abstract: Existing research shows that loyalty is a function of customer perceptions of trust following service recovery. The authors propose a cognitive appraisal model that portrays trust and emotions as key mediators in the relationship between perceived justice and customer loyalty. A structural equation model was used to test the conceptual model. The findings support the conjecture that emotions and trust have important mediating roles during the service recovery process. Furthermore, while existing research has focused primarily on negative emotion, the authors' model adopts a two-dimensional view of emotion (positive and negative emotions), and the results support the inclusion of both dimensions. Overall, the empirical support for the proposed model has important managerial implications for effective relationship management. By understanding the important mediating roles of trust and emotion, service employees can deliver more effective service recovery strategies and thereby enhance customer loyalty.

Management Support with Structured and Unstructured Data-An Integrated Business Intelligence Framework

Abstract: In the course of the evolution of management support towards corporate wide Business Intelligence infrastructures, the integration of components for handling unstructured data comes into focus. In this paper, three types of approaches for tackling the respective challenges are distinguished. The approaches are mapped to a three layer BI framework and discussed regarding challenges and business potential. The application of the framework is exemplified for the domains of Competitive Intelligence and Customer Relationship Management.

How to Profit From a Better ¿Virtual Customer Environment¿

Abstract: Many companies have established technology-based platforms or virtual customer environments to partner with their customers in innovation and value creation. In pursuing such initiatives, most companies seem to focus primarily on customers? innovative contributions, paying limited attention to customers? interaction experiences in the VCE. But the VCE experience has broader and more profound implications ? particularly for customer relationship management. In this article, the authors offer a framework to help companies understand and evaluate customers? VCE experience profile. The authors describe five customer roles in innovation and value cocreation: product conceptualizer, product designer, product tester, product support specialist and product marketer. Each role has something to offer. However, depending on the customer innovation role, the nature of the customer interactions and the technologies used in the VCE will vary. The VCE customer experience is made up of four components: the pragmatic experience (its ability to provide information), the sociability experience (how it promotes group discussion), the usability experience (defined by the quality of the human-computer interactions) and the hedonic experience (relating to mental stimulation and entertainment). Drawing on examples from companies including Microsoft, SAP, Samsung, BMW, Volvo and Ducati, the authors suggest strategies and practices to enhance customer experiences in VCEs and ensure favorable outcomes in terms of both innovation management and customer relationship management. Designing and implementing the right system can help companies improve innovation and customer relationship management. Therefore, managers should view their VCE initiatives as an integral part of their overall innovation and customer strategies. What?s more, the costs of implementation can vary widely. Therefore, companies need to be careful about selecting and implementing a portfolio of strategies and practices that meets the needs of the types of customers they want to engage in value cocreation.

Database Marketing: Analyzing and Managing Customers

Abstract: Introduction.- Why Database Marketing.- Organized for Database Marketing.- Customer Privacy in a CRM Environment.- LTV Fundamentals.- LTV Advanced Issues.- LTV Applications.- Sources of Data.- Test Design and Analysis.- The Predictive Modeling Process.- Foundations of Statistical Modeling.- RFM Analysis.- Market Basket Analysis.- Collaborative Filtering.- Discrete Dependent Variable and Duration Models.- Cluster Analysis.- Decision Trees.- Neural Networks.- Machine Learning.- Acquiring Customers.- Cross-Selling and Up-Selling.- Frequency Reward Programs.- Customer Tier Programs.- Churn Management.- Multi-Channel Customer Management.- Acquisition and Retention Management.- Communications Design.- Multi-Contact Customer Management.- Pricing.- Glossary of Database Marketing Terms.- Index.

Methods and systems for brands social networks (bsn) platform

Abstract: Methods and Systems for Global Online Brands Social Networks (BSN) Platform and Framework are disclosed for managing Users' Profiles, brands group lists, Brand user Friends, User created Brand Networks and related Members, Publications, Applications, Services and Communications and Collaborations among users. Further, it also manages brand owners' brand networks and members, and brand experts to enable and facilitate users for branded products and services related sales or e-commerce, marketing, promotion and support services, alternative products and services brands lists. BSN also provides Social Customers Relationship Management (SCRM) and Multi Brand Customers Services Life Cycle (MCSLC) Framework to facilitate brand owners and customers.

A hidden Markov model of customer relationship dynamics

Abstract: This research models the dynamics of customer relationships using typical transaction data. Our proposed model permits not only capturing the dynamics of customer relationships, but also incorporating the effect of the sequence of customer-firm encounters on the dynamics of customer relationships and the subsequent buying behavior. Our approach to modeling relationship dynamics is structurally different from existing approaches. Specifically, we construct and estimate a nonhomogeneous hidden Markov model to model the transitions among latent relationship states and effects on buying behavior. In the proposed model, the transitions between the states are a function of time-varying covariates such as customer-firm encounters that could have an enduring impact by shifting the customer to a different (unobservable) relationship state. The proposed model enables marketers to dynamically segment their customer base and to examine methods by which the firm can alter long-term buying behavior. We use a hierarchical Bayes approach to capture the unobserved heterogeneity across customers. We calibrate the model in the context of alumni relations using a longitudinal gift-giving data set. Using the proposed model, we probabilistically classify the alumni base into three relationship states and estimate the effect of alumni-university interactions, such as reunions, on the movement of alumni between these states. Additionally, we demonstrate improved prediction ability on a hold-out sample.

Recommendation Systems with Purchase Data

Abstract: Many firms use decision tools called “automatic recommendation systems” that attempt to analyze a customer's purchase history and identify products the customer may buy if the firm were to bring these products to the customer's attention. Much of the research in the literature today attempts to recommend products that have a high probability of purchase (conditional on the customer's history). However, the author posits that the recommendation decision should be based not on purchase probabilities but rather on the sensitivity of purchase probabilities to the recommendation action. This article attempts to model carefully the role of firms' recommendation actions in modifying customers' buying behaviors relative to what the customers would do without such a recommendation intervention. The author proposes a simple consumer behavior model that accommodates a transparent role for a firm's recommendation actions. The model is expressed in econometric terms so that it can be estimated with available ...

Mobile banking innovators and early adopters: How they differ from other online users?

Abstract: The rapid pace of technological development has created opportunities for financial service providers to offer their services via multiple electronic channels. The mobile phone is one of the most promising but so far marginally adopted channel for using financial services by consumers. Earlier literature on innovation adoption argued that those among the first to adopt new innovations possess unique characteristics compared to the majority of consumers. This paper aims to study how mobile banking innovators and early adopters differ from other users of online banking services. An internet survey was conducted among customers of a large Scandinavian bank in Finland yielding 2,675 responses. Logistic regression was used to identify variables differentiating between users of mobile banking and other online banking services. Somewhat contradictory to earlier findings the results indicate that only age (p<0.0005) and gender (p=0.010) differentiate these two groups of customers, while education (p=0.957), income (p=0.624), occupation (p=0.596) and size of the household (p=0.151) were found to be insignificant in differentiating the groups. The results offer service providers better knowledge of the typical mobile banking user thus adding value to their marketing actions in the field of electronic banking.

The influence of loyalty programme membership on customer purchase behaviour

Abstract: Purpose – In the retailing sector, consumers typically patronize multiple outlets, which leaves outlets striving to earn a greater portion of consumer expenditures. The purpose of this paper is to improve theoretical and empirical knowledge about the impact of retailing loyalty programmes on customer purchasing behaviour.Design/methodology/approach – The effects of two loyalty programmes on customer behaviour are studied through marketwide panel data on supermarket purchases.Findings – The impact of loyalty programme membership on customer purchase behaviour is significant.Research limitations/implications – All behavioural indicators show that members and non‐members of loyalty programmes demonstrate significantly different purchase behaviours, irrespective of other factors. The purchase intensity of cardholders, in terms of total and average shopping baskets, share of purchases, purchase frequency and inter‐purchase time, is significantly higher than that of non‐members throughout the entire three‐year ...

High Touch Through High Tech: The Impact of Salesperson Technology Usage on Sales Performance via Mediating Mechanisms

Abstract: Sales technology has been touted as a primary tool for enhancing customer relationship management. However, empirical research is sparse concerning the use of information technology (IT) and its effects on the relationship between salespersons and customers. Using an interdisciplinary research approach, we extend task-technology-fit (TTF) theory by examining the mechanisms through which use of IT by the sales force influences salesperson performance. We test a model that incorporates salespersons' customer service, attention to personal details, adaptability, and knowledge---key marketing constructs that could mediate IT's impact on salesperson performance. Results in a pharmaceutical sales setting indicate that IT use can improve customer service and salespersons' adaptability, leading to improved sales performance.

Common competencies for all healthcare managers: the Healthcare Leadership Alliance model.

Abstract: Today's healthcare executives and leaders must have management talent sophisticated enough to match the increased complexity of the healthcare environment. Executives are expected to demonstrate measurable outcomes and effectiveness and to practice evidence-based management. At the same time, academic and professional programs are emphasizing the attainment of competencies related to workplace effectiveness. The shift to evidence-based management has led to numerous efforts to define the competencies most appropriate for healthcare. The Healthcare Leadership Alliance (HLA), a consortium of six major professional membership organizations, used the research from and experience with their individual credentialing processes to posit five competency domains common among all practicing healthcare managers: (1) communication and relationship management, (2) professionalism, (3) leadership, (4) knowledge of the healthcare system, and (5) business skills and knowledge. The HLA engaged in a formal process to delineate the knowledge, skills, and abilities within each domain and to determine which of these competencies were core or common among the membership of all HLA associations and which were specialty or specific to the members of one or more HLA organizations. This process produced 300 competency statements, which were then organized into the Competency Directory, a unique and interactive database that can be used for assessing individual and organizational competencies. Overall, this work helps to unify the field of healthcare management and provides a lexicon and a basis for collaboration among different types of healthcare executives. This article discusses the steps that the HLA followed. It also presents the HLA Competency Directory; its application and relevance to the practitioner and academic communities; and its strengths, limitations, and potential.

An Empirical Study on the Integrated Framework of e-CRM in Online Shopping: Evaluating the Relationships Among Perceived Value, Satisfaction, and Trust Based on Customers' Perspectives

Abstract: Based on customer cognitive, affective and conative experiences in Internet online shopping, this study, from customers’ perspectives, develops a conceptual framework for e-CRM to explain the psychological process that customers maintain a long-term exchange relationship with specific online retailer. The conceptual framework proposes a series of causal linkages among the key variables affecting customer commitment to specific online retailer, such as perceived value (as cognitive belief), satisfaction (as affective experience) and trust (as conative relationship intention). Three key exogenous variables affecting Internet online shopping experiences, such as perceived service quality, perceived product quality, and perceived price fairness, are integrated into the framework. This study empirically tested and supported a large part of the proposed framework and the causal linkages within it. The empirical results highlight some managerial implications for successfully developing and implementing a strategy for e-CRM.

Practice Prize Report---The Power of CLV: Managing Customer Lifetime Value at IBM

Abstract: Customer management activities at firms involve making consistent decisions over time, about: a which customers to select for targeting, b determining the level of resources to be allocated to the selected customers, and c selecting customers to be nurtured to increase future profitability. Measurement of customer profitability and a deep understanding of the link between firm actions and customer profitability are critical for ensuring the success of the above decisions. We present the case study of how IBM used customer lifetime value CLV as an indicator of customer profitability and allocated marketing resources based on CLV. CLV was used as a criterion for determining the level of marketing contacts through direct mail, telesales, e-mail, and catalogs for each customer. In a pilot study implemented for about 35,000 customers, this approach led to reallocation of resources for about 14% of the customers as compared to the allocation rules used previously which were based on past spending history. The CLV-based resource reallocation led to an increase in revenue of about $20 million a tenfold increase without any changes in the level of marketing investment. Overall, the successful implementation of the CLV-based approach resulted in increased productivity from marketing investments. We also discuss the organizational and implementation challenges that surrounded the adoption of CLV in this firm.

Critical Incidents and the Impact of Satisfaction on Customer Share

Abstract: In business markets, the long-term nature of relationships may prompt parties to conduct “business as usual,” but negative critical incidents (CIs) can cause a destabilization of these long-term relationships. The authors develop a comprehensive dynamic model of customer loyalty to account for the impact of negative CIs on both the nature and the magnitude of the relationships between satisfaction and customer share. The results indicate that CIs trigger a stronger updating of the customer relationship, which moves customers from a business-as-usual mind-set to a reconsideration of the relationship. Furthermore, nonlinearities in the relationships are much more pronounced in the presence of CIs. Depending on the relationship quality, CIs have different consequences for customer relationships, and if relationship quality is high, a negative CI can even have a positive impact on customer share.

The moderating effect of brand image on public relations perception and customer loyalty

Abstract: Purpose – The purpose of the paper is to investigate the relationship between customer perceptions of public relations (PR) and customer loyalty; to test for the moderating role of brand image in that relationship.Design/methodology/approach – Data were collected in a survey of customers of the insurance industry in Taiwan, using a questionnaire designed on the basis of focus‐group discussions with 30 consumers. Hierarchical regression analysis of data from 367 respondents was used to test two hypotheses.Findings – The results show that consumers' perception of an organisation's PR practice is an antecedent of loyalty. The impact of public relations perception (PRP) on customer loyalty is stronger and more significant when the brand image is favourable. If it is unfavourable, the effect of PRP on customer loyalty is negligible.Research limitations/implications – This study extends previous research by examining the moderating role of brand image. Further research is indicated, to identify the key moderato...

Effects of self‐service technology on customer value and customer readiness

Abstract: Purpose – The purpose of this paper is to investigate whether self‐service technology (SST) can enhance customer value (CV) and customer readiness (CR). In addition, it is proposed to inspect the effects of CV and CR in customers' continued use of Internet banking.Design/methodology/approach – An online survey was used with a sample of 771 respondents. Structural equation models (SEM) were used to examine 11 hypotheses in the theoretical framework.Findings – SST characteristics (i.e. ease of use, usefulness, costs saved, and self‐control) demonstrated positive effects on CV and CR. CR is positively related to CV. Furthermore, customers are willing to use Internet banking when CV and CR are high.Research limitations/implications – The study examines the factors contributing to positive effects on customers' continued use of Internet banking. Further research is recommended to investigate the effects of negative factors, such as risk and complexity. In addition, the same methods should be used to reproduce ...

Employees' affective commitment to change: The key to successful CRM implementation

Abstract: Purpose – Although organizational change is inevitable with customer relationship management (CRM) implementation, very little is known about how this change affect employees, and how their actions in turn influence the success of CRM projects. The purpose of this study is to address this void in the current CRM literature.Design/methodology/approach – Using an exploratory approach, 13 in‐depth interviews were conducted with bank managers and staff of three banks to provide preliminary support for the conceptual framework.Findings – The three banks approached their CRM projects with very different results. Two banks achieved less success from their CRM implementation as a result of too little focus being placed on managing CRM‐induced change and people. Only one bank focused a large part of its CRM budget on change management and the organizational factors critical to the implementation. Results demonstrate a possible correlation between employees' commitment to the CRM initiative and the positive outcome...

Expanding business-to-business customer relationships: modeling the customer's upgrade decision

Abstract: This article develops a model of a business customer’s decision to upgrade service contracts conditional on the decision to renew the contract. It proposes that the firm’s upgrade decision is influenced by (1) decision-maker perceptions of the relationship with the supplier, (2) contract-level experiences, and (3) interactions between firmand contract-level variables. The authors model the firm’s decision as a binary logit model with random parameters for the contract-level variables and fixed parameters for the firm-level variables. They estimate the model with data describing more than 2000 service contracts and find that decision-maker satisfaction, service quality, and price have a significant effect on the decision to upgrade; price and satisfaction also moderate the effect of service quality on the decision. Simulations indicate that modest improvements in service quality for a focal contract can have a relatively large, positive effect on the likelihood that the firm will upgrade. The results suggest that suppliers need to manage their firm relationships at both the individual contract level and the overall firm level. In addition, the results suggest specific windows of opportunity for suppliers when firms may be more likely to upgrade to higherlevel service contracts.

The Sales Force Technology–Performance Chain: The Role of Adaptive Selling and Effort

Abstract: Firms continue to struggle with the implementation of sales force technology tools and the role they play in sales representative performance. This research expands previous literature in the area of sales force automation (SFA) and customer relationship management (CRM) by looking at the consequences after technology adoption by a sales force. Data were gathered from three sources to include 662 sales representatives, 60 sales managers, and fi rm archival data. Using structural equation modeling, our fi ndings indicate that SFA usage has a direct impact on effort, thereby reducing number of hours worked, and CRM usage has a direct positive impact on adaptive selling behaviors. Moreover, experience moderates the relationship between CRM usage and adaptive selling. Discussion, limitations, and directions for future research are also discussed.

What makes for CRM system success — Or failure?

Abstract: Although customer relationship management (CRM) has been one of the fastest growing businesses of the new millennium, critics point to the high failure rate of the CRM projects as evidenced by commercial market studies. The purpose of the study is to investigate success and failures of CRM system implementations. We found that the scope, size, complexity and duration of the CRM projects seem to vary quite significantly across firms. Poor planning, lack of clear objectives and not recognising the need for business change are the key reasons for CRM failures.

The four things a service business must get right.

Abstract: Many of the management tools and techniques used in service businesses were designed to tackle the challenges of product companies. Although they are valuable to service managers, they aren't sufficient for success. In this article, Harvard Business School's Frei explains why and urges companies to add some new ones to the mix. After years of extensive research and analysis, she offers an approach for crafting a profitable service business based on four critical elements: the design of the offering, employee management, customer management, and the funding mechanism. Just like a product that's going to market, a service needs to be compellingly designed, and management must field a workforce capable of producing it at an attractive price. Additionally, however, service firms must manage their customers, who do not simply use the service but also can be integral to its production: Because customers' involvement as producers can wreak havoc on costs, companies must also develop creative ways to fund their distinctive offerings, by providing a self-service alternative, for example, or by offsetting expenses with operational savings. A close look at successful service businesses--Wal-Mart, Commerce Bank, the Cleveland Clinic, and others--reveals that effective integration of the four elements is key. There is no "right" way to combine them; the appropriate design of one depends upon the other three. If managers don't get all four pulling together, they risk pulling the enterprise apart. Incumbents can fend off attacks from highly focused upstarts by becoming multifocused--that is, by pursuing multiple niches through optimized service models rather than trying to cover the entire waterfront with one model. Shared services within a firm (functions such as HR and finance) can help, since they will enable it to generate economies of scale and experience across models.

System and method for sequential decision making for customer relationship management

Abstract: A system and method for sequential decision-making for customer relationship management includes providing customer data including stimulus-response history data, and automatically generating actionable rules based on the customer data. Further, automatically generating actionable rules may include estimating a value function using reinforcement learning.