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We study how to use delay announcements to manage customer expectations while allowing a firm to prioritize among customers with different sensitivities to time and value. We examine this problem by developing a framework that characterizes the strategic interaction between the firm and heterogeneous customers. When the firm has information about the state of the system, yet lacks information on customer types, delay announcements play a dual role: they inform customers about the state of the system, while they also have the potential to elicit information on customer types based on their response to the announcements. The tension between these two goals has implications for the type of information that can be shared credibly. To explore the value of the information on customer types, we also study a model where the firm can observe customer types. We show that having information on the customer type may improve or hurt the credibility of the firm. While the creation of credibility increases the firm’s profit, the loss of credibility does not necessarily hurt its profit. This paper was accepted by Noah Gans, stochastic models and simulation.

In this paper, we propose a diffusion model for a subscription service. The evolution over time of the number of subscribers is governed by a differential equation combining two processes—namely, a customer acquisition process and a customer attrition process. Assuming profit-maximization behavior of the firm, we use dynamic programming to optimize the customer equity and determine optimal customer relationship marketing expenditures. We implement an augmented Kalman filter with continuous state and discrete observations to estimate the model’s parameters using market data of two well-known companies in the telecommunications sector. To the best of our knowledge, this is the first paper to model acquisition and retention efforts in the context of a diffusion model. By doing so, we extend the literature on product diffusion to services—that is, beyond its traditional area of durable (and occasionally nondurable) products. By the same token, we contribute to the literature on customer relationship marketing (CRM), where social interactions have been overlooked. Our analytical and numerical results provide a better understanding of the relationships among the optimal customer equity, the customer lifetime value, the prospect lifetime value, and the optimal acquisition and retention spending. Our model and estimation approach give the tools for assessing empirically the role of CRM spending, social interactions, and other factors in the service subscription dynamics. Our main empirical results are as follows: (i) CRM spending and external incentives have indeed a significant effect on acquisition and retention processes; (ii) the impact of CRM is market specific; (iii) compared with optimal levels, both firms underinvest in retention; and (iv) whereas we observe increasing spending in acquisition over time, the derived optimal policy recommends a decreasing level of spending over time. This paper was accepted by Eric Anderson, marketing.

Purpose This paper examines the influence of three dimensions of customer knowledge management – knowledge from customer, knowledge for customer and knowledge about customer – on innovation capabilities (speed and quality) and new service market performance. Design/methodology/approach The model links three dimensions of customer knowledge management to two dimensions of innovation capabilities. Further, the model links two dimensions of innovation capabilities to new service market performance. Analysis was conducted through structural equation modelling using SmartPLS software, using data from 253 managers representing 26 banks in Bangladesh. Findings The findings of this study show that knowledge from customer and knowledge for customer are the most influential predictors of new service market performance. Of the three dimensions of customer knowledge management, knowledge from customer turns out to be the strongest predictor of innovation quality and speed. Innovation quality has a greater impact on new service market performance than innovation speed. Innovation capability (quality and speed) plays a mediating role in this study. Practical implications Managing knowledge from, for and about customer should be systematically considered as a synergy approach to firms’ processes and activities to co-create value with customers. In particular, managers should put more emphasis on knowledge from and for customer to enhance innovation capacity and achieve success in the development of a new service. Originality/value This paper empirically supports the significant influence of knowledge from, for and about customer on innovation capabilities (quality and speed) and new service market performance. While the results provide guidance for researchers and practitioners, it also adds value to innovation-related research.

Purpose This paper aims to examine the influence of value co-creation by external and internal stakeholders of logistics service organizations on both customer loyalty as well as superior service solutions. The mediating role of superior service solutions between the value co-creation strategies of organizations and customer loyalty is also investigated in a marketing channel environment. Design/methodology/approach Survey data of small and medium enterprises’ executives (n = 330) are analysed using exploratory factor analysis and structural equation modelling to investigate the impact of six hypothesized relationships through value co-creation. Findings This study indicates that coordinated efforts to create value by external and internal stakeholders to achieve superior service solutions have a strong impact on creating loyalty among customers. Research limitations/implications The effectiveness of this research has been validated in a number of ways including interviewing four of the stakeholders of a case organization that implemented the model. This study offers understanding of the roles of value co-creation, to a key to organizational success in marketing channels. Originality/value This paper elucidates the impact of value co-creation on the business performance of logistics service organizations. With empirical evidence, the paper contributes to fill the knowledge gaps on how the process of value co-creation by different stakeholders influences customer loyalty in a service context. The mediating role of superior service solution between value co-creation by different stakeholders and business customer loyalty is also examined, adding to its significance.

Using the notion of customer concentration, the authors argue that firms should evenly spread their revenues across their customers, rather than focusing on a few major customer relationships. Prior literature suggests that major customers improve efficiency and provide access to resources, thereby producing positive performance outcomes. However, building on industrial organizational literature and modern portfolio theory, the authors argue that concentration of revenues reduces the supplier firm's bargaining power relative to its customers and hurts the ability of the supplier firm to appropriate value, which, in turn, hurts profits. Using a sample of 1,023 initial public offerings (IPOs) and robust econometric methods, they find that customer concentration reduces investor uncertainty and positively impacts IPO outcomes, but significantly hurts balance sheet–based outcomes (e.g., profitability). The results suggest that a 10% increase in customer concentration reduces profitability by 3.35% (or about $7 million) in the subsequent year, or 9.4% cumulatively over the next four years (or about $20.32 million). Further, the authors find that the negative effects of customer concentration decrease with increase in organizational (marketing, technological, and operational) capabilities and increase with low customer credit quality.

This study contributes to the understanding of customer relationship management by assessing how an in-store customer return experience can influence customer exchange behavior and satisfaction during a return event, and customer repurchase behavior following a return event. Exchanges, satisfaction, and repurchases are potential customer relationship management outcomes that may contribute to customer lifetime value. We empirically examine these outcomes with respect to two store labor factors: salesperson competence and selling pressure. Using transactional data and 7921 customer satisfaction survey responses obtained from a jewelry retailer, we demonstrate an in-store return experience may contribute to customer lifetime value more through future purchases than through immediate exchanges. We show convincing customers to exchange their returns may decrease their future purchases if customers are dissatisfied with their return experience. Our results suggest, in order to increase both exchanges and future purchases, retailers should improve the competence of employees who handle returns and abstain from using selling pressure during a return experience. We also conduct a counterfactual analysis to assess the impact on net sales of several return experience improvement initiatives. Overall, our analysis provides evidence that an in-store return experience represents a significant opportunity for retailers when handled carefully.

In recent years, a theme park drives significant attention in tourism industry due to the provision of quality and integrated service, and issuing annual pass cards help the theme park to differentiate long-term customers from short-term ones. Customer Value Analysis is demanded for theme parks to identify potential customers as well as to appraise customer value through the setting of the annual pass. Moreover, customer value often alters from time to time since theme park industry is relevantly competitive and innovation demanded than other industries, and customer preferences are frequently changed. This study provides an early warning system to support the theme park to detect, monitor and analyze the changes of customer value. By applying the aggregated approach based on Rough Set Theory and Recency, Frequency and Monetary architecture, the tourist satisfaction levels can be captured after the aforementioned approach is executed. In addition, the rule comparison approach is contributed to predicting customer behavior from technical viewpoint. This study aims at providing an early correction strategy for the theme park to avoid losing VIP customers and identify latent customers.

Purpose The paper aims to address the issue of how customer value is created in the context of novel food products and how customer value influences product evaluation. Design/methodology/approach The study proposes a model formed by a series of causal relations among value (i.e. functional, social, hedonic, altruistic values) and cost perceptions (i.e. price, effort, evaluation costs, performance and product safety), their trade-offs (i.e. overall customer value) and product evaluation outcomes (i.e. satisfaction, trust). Findings Despite doubts about certain search (information), credence (safety) and experience (taste) attributes, perceptions about product quality, likeability and ethical image predominantly formulate customer value, indicating novel products’ potential to be evaluated positively by consumers. Research limitations/implications The proposed model advances knowledge in the context of product innovation. Contrary to past research that focuses on consumer attitudes towards a manufacturing technology and individual technology-specific risks and benefits, the customer value approach refers to novel product-related consumer attitudes conceptualized as overall customer value; the latter results from product-related value-cost trade-offs, leading towards specific consumer–product evaluations. Practical implications The customer value approach refers to the value from the adoption of a new product that underlies a relevant set of product attributes (e.g. quality, image, sustainability, price, convenience, taste, safety, etc.) Focusing on product attributes that generate gain – loss perceptions impactful on consumer – product evaluations is highly relevant for product managers concerned with new product development. Originality/value The originality of this work lies in the successful contextualization and testing of an inclusive model that comprises both emotional and rational components, operational at the product level, to generate substantial insights on the widely unexplored interplay between consumer – perceived customer value and the generation of consumer – product evaluation outcomes.

Data sharing is a strategically important marketing initiative in many industries. Increasingly, companies seek to enhance the value of their customer data by supplementing this information with customer-level information from another company. However, this arrangement requires one company to reveal its customer-level data to another and face privacy risks which may result in substantial losses in brand value, customer trust, and competitive advantage, or legal penalties from not conforming to regulations. To overcome this problem, we propose a decision-theoretic approach for use by companies to protect their customer segmentation data prior to entering into collaborative arrangements. Our approach extends the literature because it allows the data provider to protect all customer segmentation data at the individual customer level instead of only at the aggregate level. We show that the optimal data protection strategy depends on a risk-return tradeoff based on the probabilities of misclassification of customers into segments, the opportunity costs of erroneously assigning segment membership, and the anticipated cost of a data breach.

Purpose The purpose of this paper is to extend the theory of consumption values by investigating the influence of aesthetic, conditional, convenience, monetary, epistemic, self-gratification, and social value on customer pre-adoption choice behavior to use mobile financial services. Design/methodology/approach Data were collected using an online survey questionnaire resulting in 524 total responses from registered users of M-PESA mobile financial services in Kenya, ultimately resulting in a usable sample of 384 responses. Partial least squares was used to evaluate the research model and associated hypotheses. Findings Aesthetic, conditional, convenience, monetary, epistemic, and self-gratification value are positive determinants of customer pre-adoption choice behavior to use M-PESA mobile financial services, but not social value. Research limitations/implications Survey participants were limited to customers of M-PESA mobile financial services in Kenya. The study findings present important implications for managers and academic researchers in the mobile financial services market. Originality/value This is one of the first empirical studies to investigate customer pre-adoption choice behavior to use M-PESA mobile financial services from the perspective of customer perceived value.

Purpose The purpose of this paper is to examine the effect of a firm’s customer base concentration on its loan contract terms and how this effect varies with the strength of its customer relationship. Design/methodology/approach This study is an archival research based on a sample of US public firms that have loan contract data between 1990 and 2008. Major customer sales data are used to construct customer concentration and customer relationship measures. A debt contract model is employed to relate loan spread and other contract terms to customer concentration and relationship. Findings This study finds that firms with more concentrated customer bases have higher loan spread and shorter loan maturity and are more likely to issue secured loans. These negative effects disappear when the supplier firm maintains strong relationship with its customers. Research limitations/implications Additional forward-looking measure of customer relationship could benefit future research. Practical implications A firm’s customer base characteristics can have significant impacts on the terms of its loan contracts. Findings from this study support the notion that customer relationship is an important intangible asset that is informative to stakeholders of the firm. Originality/value This study proposes a new measure of customer relationship based on the past repeated relationships between a firm and its major customers. It shows that customer characteristics may affect firms’ contracts with creditors: customer base concentration increases credit risk whereas strong customer relationship improves credit quality.

Purpose For its sustainable growth, an organization should drive customers from the role of consumers of products or services to value co-creators. Logistics performance, which produces value for customers, may activate value co-creation behavior among them. The purpose of this paper is to investigate entrepreneurial orientation (EO) as the determinant and customer value co-creation behavior as the outcome of logistics performance. Design/methodology/approach The data for this research came from 328 dyads of logistics managers of chemical manufacturers and purchase managers of their customer companies in Vietnam context. The data were analyzed using structural equation modeling approach. Findings The research results confirmed the role of EO in predicting logistics performance. Logistics performance was also found to positively influence customer-organization identification, which, in turn promoted customer value co-creation behavior. Originality/value Entrepreneurship, logistics, and marketing research streams converge through the research model of the relationship between EO, logistics performance, and customer value co-creation behavior.

Purpose The purpose of this paper is to propose a new RFM model called length, recency, frequency, monetary and periodicity (LRFMP) for classifying customers in the grocery retail industry; and to identify different customer segments in this industry based on the proposed model. Design/methodology/approach This study combines the LRFMP model and clustering for customer segmentation. Real-life data from a grocery chain operating in Turkey is used. Three cluster validation indices are used for optimizing the number of groups of customers and K-means algorithm is employed to cluster customers. First, attributes of the LRFMP model are extracted for each customer, and then based on LRFMP model features, customers are segmented into different customer groups. Finally, identified customer segments are profiled based on LRFMP characteristics and for each customer profile, unique CRM and marketing strategies are recommended. Findings The results show that there are five different customer groups and based on LRFMP characteristics, they are profiled as: “high-contribution loyal customers,” “low-contribution loyal customers,” “uncertain customers,” “high-spending lost customers” and “low-spending lost customers.” Practical implications This research may provide researchers and practitioners with a systematic guideline for effectively identifying different customer profiles based on the LRFMP model, give grocery companies useful insights about different customer profiles, and assist decision makers in developing effective customer relationships and unique marketing strategies, and further allocating resources efficiently. Originality/value This study contributes to prior literature by proposing a new RFM model, called LRFMP for the customer segmentation and providing useful insights about behaviors of different customer types in the Turkish grocery industry. It is also precious from the point of view that it is one of the first attempts in the literature which investigates the customer segmentation in the grocery retail industry.

Purpose The purpose of this paper is to examine the relationship between customer loyalty and customer dependence in the context of modern format and traditional format stores. In the process, the role of switching cost and trust in this relationship has been explored. Design/methodology/approach Building on the literature, the authors have postulated a conceptual model and formulated relevant hypotheses. Quantitative methodology is applied with previously established. The data were collected through convenient sampling. Methods like Factor analysis, cross-tab and regression analysis have been used. Findings The findings indicate a significant relationship between customer loyalty and customer dependence. Switching cost and trust have been found to have a moderating effect over the relationship in both modern and traditional environments. Research limitations/implications The limitation is the restriction to the Jammu context. The studies have brought about the difference in attitudinal and behavioural loyalty. Future research can be carried out on the role of dependence in explaining and strengthening this relationship. Originality/value The present study provides an insight into for the customer loyalty and customer dependence in the context of modern and traditional retail formats.

Traditional approaches to managing customer churn have typically concentrated on those customers most likely to defect. While accurately predicting customer churn probability is important, this metric alone does not sufficiently empower managers to make optimal decisions. Hence, the current study focuses on the relationship between retention incentives and profit maximisation. Specifically, we improve existing churn management practices by: (1) allowing for customer heterogeneity in incentive redemption behaviour, (2) introducing the dependence of the probability of accepting an incentive on its monetary value, and (3) offering an improved model for developing retention campaigns. We support our conclusions with empirical data and simulations and make tangible managerial recommendations.

Customer Relationship Management needed for the company to know their customer more closed, and make two-way communication between company and customer. in CRM solutions are multi-criteria decision-making analysis tools that do not require prior assumptions to explore the weights and performances among project risk, project management and organization performance, based on research framework of stimulus-organism response model. in this study, Machine learning with Support Vector Machine algorithm is currently for classification task due to its ability to model nonlinearities CRM Solutions. With Machine Learning and CRM, Bank X optimize their profit, with manage their more benefit customer or find a new customer or get their lost potential customer back.

Purpose This paper aims to examine the roles of both aggregate and specific commission rates to control the sales force in relationship marketing with a customer portfolio. Design/methodology/approach Drawn on the concept of customer lifetime value and agency theory, the author calculated both specific and aggregate sales force commission rates in a relationship marketing perspective. Contrary to the prior researchers, the author assumes that, at any period, both the gross margins and retention rate of each customer are a stochastic function of the salesperson’s effort. Findings The results indicated that when there is symmetric information between a sales manager and salesperson, both aggregate and specific commissions can be used to monitor the sales force. Under asymmetric information, however, each type of commission rate can only be used under certain conditions. In addition, conditions in which the aggregate commission is equivalent to the specific commission for each customer were derived. Research limitations/implications Hypothetical data were used to explain the model. It would be more appropriate to use real data to see its managerial relevance. Originality/value In the author’s knowledge, this study is the first that specifically links scholastic customer’s retention and salesperson commission rate to monitor salesperson effort in relationship marketing. It is also the first that shows in which conditions aggregate and specific commission rates are equal for a salesperson’s customer portfolio management.

In today’s business world, computers are connected to the broadband wide area network (WAN), allowing businesses to integrate industrial value chains and provide customers with various value-added services. Consequently, the virtual community of a public service network can be created and marketing channels in e-generation can be established to provide customers with relevant information or commodities and services through the use of highspeed transmission systems and interactive delivery. However, if e-commerce operators are not fully aware of the characteristics of e-generation consumers, if website operators lack the necessary competitive edge, or if the Internetbased transaction mechanism is not secure, consumers may not be attracted to or continue their interest in online shopping. In the Internet world of e-commerce, it is difficult to fully grasp the changes in customer demands along with the gradual opening of information on the web. To be profitable, it is more important to obtain the value created by loyal customers for businesses in addition to a wide range of online visitors. By integrating the analyses of e-commerce with 244 questionnaires and validating the data with statistical analysis methods, this study provides e-commerce business owners with suggestions on marketing strategies and proposes future directions for subsequent research based on the research findings.

Purpose: The purpose of the study was to examine the effects of marketing strategies on the performance of Equity Bank.Methodology: The study adapted a descriptive research design which was exploratory in nature to obtain qualitative information. The target population was customers of two branches of Equity Bank Westlands, Nairobi County. For the study, a questionnaire was the preferred instrument for data collection and before the study was conducted, the questionnaire was pre-tested to gauge its validity and reliability.Results: The findings revealed that marketing strategies considered in this study namely customer relationship management, customer satisfaction, communication and customer loyalty have a positive relationship with performance. Additionally, the relationship was significant at 95% confidence since p

This exercise is one in a series intended to help students learn how to perform financial calculations in marketing contexts.Maru Keitou, a decorated former collegiate softball player with a PhD from Oxford University, ran Maru Batting Center in the Roppongi district of Tokyo's Minato ward. She had a deep knowledge of the game and of her customers, but she lacked a marketing background. She had recently signed up for a hosted customer relationship management service that would allow her to track the cost of acquiring and serving each of her four main customer segments. Using this data, she could determine which segments to target in the upcoming year.The exercise describes the use of calculations of customer acquisition cost, retention rates, and customer lifetime value in picking between market segments and various options for activities to acquire customers.Maru Keitou, a decorated former collegiate softball player with a PhD from Oxford University, ran Maru Batting Center in the Roppongi district of Tokyo's Minato ward. She had a deep knowledge of the game and of her customers, but she lacked a marketing background. She had recently signed up for a hosted customer relationship management service that would allow her to track the cost of acquiring and serving each of her four main customer segments. Using this data, she could determine which segments to target in the upcoming year.The exercise describes the use of calculations of customer acquisition cost, retention rates, and customer lifetime value in picking between market segments and various options for activities to acquire customers.After completing the exercise, students should be able to: Calculate customer acquisition cost Determine customer break-even Calculate and explain customer lifetime value

In this return on investment (ROI) for customer relationship management (CRM) case scenario, students must calculate the ROI for analytic CRM enabled by an enterprise data warehouse. The case is based upon a real-life consulting engagement with a major Fortune 100 telecommunications company. In this case the executive management team's strategic objective is to grow the customer base by 5 percent annually by customer acquisition. The internal rate of return calculated from the data given in the case is more than 800 percent for one year, and sensitivity analysis shows this is a robust projection, suggesting it should be funded without question. However, the strategy of the firm is customer acquisition in an environment of high customer churn. As a result of these dynamics, the revenues and net income of the firm are actually decreasing by hundreds of millions of dollars each year. A better solution would realize that the executive team has the incorrect strategic objective. Customer acquisition is the wrong approach in an environment of high customer churn and executives should focus on customer retention and cross-sell and up-sell to high-value customers. The case discussion therefore takes students beyond CRM ROI to focuses on the key strategic concepts of customer relationship management.Students learn how to calculate return on investment (ROI) for analytic customer relationship management (CRM) initiatives. The case also discusses in detail the difference between operational CRM and analytic CRM. The case solution is relatively straightforward with a very good ROI. However, the true learning of the case is for students to understand the strategic context of analytic CRM and to question assumptions in any ROI model.

For most products, price is the marketing variable customers react to more than any other. While this may be less so for luxury products, marketers of luxury brands still have to set a price. Most managers emphasize costs and competition when setting price. However, the third component of price, customer value or what a customer is willing to pay, is considered less often and is, in fact, much more important than costs and competition for luxury goods. Today, in this era of digital marketing, marketers have a greater ability to understand customer value and set a price accordingly. In this paper, new approaches to digital pricing that incorporate customer value are described and shown how they impact luxury good pricing.

Along with the development of cloud computing, an increasing number of enterprises start to adopt cloud service, which promotes the emergence of many cloud service providers. For cloud service providers, how to configure their cloud service platforms to obtain the maximum profit becomes increasingly the focus that they pay attention to. In this paper, we take customer satisfaction into consideration to address this problem. Customer satisfaction affects the profit of cloud service providers in two ways. On one hand, the cloud configuration affects the quality of service which is an important factor affecting customer satisfaction. On the other hand, the customer satisfaction affects the request arrival rate of a cloud service provider. However, few existing works take customer satisfaction into consideration in solving profit maximization problem, or the existing works considering customer satisfaction do not give a proper formalized definition for it. Hence, we first refer to the definition of customer satisfaction in economics and develop a formula for measuring customer satisfaction in cloud computing. And then, an analysis is given in detail on how the customer satisfaction affects the profit. Lastly, taking into consideration customer satisfaction, service-level agreement, renting price, energy consumption, and so forth, a profit maximization problem is formulated and solved to get the optimal configuration such that the profit is maximized.

The growth of subscription-based commerce has changed the types of data that firms report to external shareholders. More than ever, companies are discussing and disclosing information on the number of customers acquired and lost, customer lifetime value, and other data. This has fueled an increasing interest in linking the value of a firm's customers to the overall value of the firm, with the term “customer-based corporate valuation” being used to describe such efforts. Although several researchers in the fields of marketing and accounting have explored this idea, their underlying models of customer acquisition and retention do not adequately reflect the empirical realities associated with these behaviors, and the associated valuation models do not meet the standards of finance professionals. The authors develop a framework for valuing subscription-based firms that addresses both issues, and they apply it to data from DISH Network and Sirius XM Holdings.

In this study, the authors propose a flexible framework to assess customer lifetime value (CLV) in the consumer packaged goods (CPG) context. They address the substantive and modeling challenges that arise in this setting, namely, (1) multiple discreteness, (2) brand switching, and (3) budget-constrained consumption. Using a Bayesian estimation, the authors are also able to infer the consumer's latent budgetary constraint using only transaction information, thus enabling managers to understand the customer's budgetary constraint without having to survey or depend on aggregate measures of budget constraints. Using the proposed framework, CPG manufacturers can assess CLV at the focal brand level as well as at the category level, a departure from CLV literature, which has mostly been firm centric. The authors implement the proposed model on panel data in the carbonated beverages category and showcase the benefits of the proposed model over simpler heuristics and conventional CLV approaches. Finally, they conduct two policy simulations describing the role of the budget constraint on CLV, as well as the asymmetric effects of pricing in this setting, and develop managerial insights in this context.

Although there are a range of conceptual and theoretical studies about customer equity (CE) measurement and management in the literature, there are few empirical studies where these two concepts are examined together. This paper focuses on the need for a more synthesised approach and addresses calls for more research into this specific area of marketing management. A conceptual framework was developed that synthesises both customer lifetime value and customer relationship management from a customer equity management (CEM) perspective. The framework was used to empirically examine how four CE strategies, together with a firm’s use of the two types of customer data (aggregated and disaggregated), impact on CEM outcomes. Data were collected from 114 hotel managers in Australia and analysed through a decision tree methodology. The results show that hotels are utilising their CE strategies for acquisition purposes more than retention purposes (customer asset management), which overall appears to satisfice more than maximise their hotel’s capacity in achieving effective CE outcomes. The study’s contribution to theory is through empirically testing a framework that combines two discrete theoretical concepts in one study to provide insights to guide future research.

Purpose Drawing on the customer value-based theory and the resource dependency theory, the purpose of this paper is to investigate how Chinese third-party logistics (3PL) providers leverage their customer orientation to improve operational performance directly in a stable environment or through building and maintaining high-quality 3PL relationships in an uncertain environment. Design/methodology/approach A survey-based approach is employed to collect data from managers at 132 3PL providers in mainland China. Confirmatory factor analysis is used to assess measures and hierarchical regression is utilized to test the hypothesized relationships. Findings This study documents significant positive effects of customer orientation and relationship quality on operational performance, as well as significant mediation effect of relationship quality. However, the effect of customer orientation on operational performance decreased, while the effect of relationship quality on operational performance became stronger, under high rather than low environmental uncertainty. Practical implications An important implication for managers based on this study is that, in order to be effective, Chinese 3PL providers would need to become more customer oriented and to continually develop and leverage high-quality 3PL relationships in order to enhance their operational performance, especially in situations of high environmental uncertainty. Originality/value The paper documents the importance of developing and leveraging high-quality 3PL relationships as a key mediator of the relationship between customer orientation and operational performance. It also documents how environmental uncertainty exerts a powerful moderating influence in this relationship, providing insights into understanding how customer orientation is leveraged by 3PL providers to improve their performance.

One of the most important tasks in marketing is to create and communicate value to customers to drive their satisfaction, loyalty, and profitability. In this study, the authors assume that customer value is a dual concept. First, in order to be successful, firms (and the marketing function) have to create perceived value for customers. Toward that end, marketers have to measure customer perceived value and have to provide customer perceptions of value through marketing-mix elements. Second, customers in return give value through multiple forms of engagement (customer lifetime value, in the widest sense) for the organization. Therefore, marketers need to measure and manage this value of the customer(s) to the firm and have to incorporate this aspect into real-time marketing decisions. The authors integrate and synthesize existing findings, show the best practices of implementation, and highlight future research avenues.

In customer relationship management (CRM), it is critical for managers to understand how and when customers terminate their relationships with the company in order to make more accurate predictions for CLV. However, in many non-contractual settings, customer churn is not easily observed, which presents difficulty for estimating customer retention. In this research, we present a framework for estimating multichannel customer relationship dynamics in a non-contractual setting that flexibly allows for relationship revival and investigates the effects of different channel experiences and marketing communication on retention and profitability. We use a multi-segment, multivariate hidden Markov modeling framework to model three managerially relevant customer behaviors: purchase amount, purchase incidence, and channel choice. Using data from a multichannel clothing retailer, we uncover two latent relationship states that customers migrate to and from — an active state and an inactive state characterized by different levels of purchase frequency, responsiveness to marketing, and profitability. We find that an offline (retail-store) channel can be used to migrate customers from an inactive state to an active state, effectively serving the purpose of “education” or “revival,” whereas an online channel is most effective in keeping the existing active customers active, thus serving the purpose of “retention”. Using counterfactual analysis, we highlight an opportunity for the multichannel firm to optimize marketing strategies to dynamically manage and increase the retention and hence also the value of its customer base.

Service research has emphasized triad relationships between a firm, employees and customers. To coordinate these stakeholders effectively, it is highly important to understand what service activities are beneficial to all or some of these stakeholders. Yet, the recent increase in C2C interaction may make the problem more complex. This study proposes a methodology combining statistical techniques and agent-based modeling, which makes it possible to assess the joint impact of each service value and C2C interaction on the payoffs.

A service provider achieves competitive advantage by configuring appropriate strategic orientation and customer value type. This paper addresses three important issues: (i) which customer value type (economical, relational or technical) is important for bank customers? (ii) which strategic market orientation (customer or competitor) helps in achieving the desired value type? and (iii) which value type significantly predicts market performance? We propose that a strategic market orientation pursued by a firm shall influence the customer value it intends to offer so as to maximize the market performance. Using data collected from 538 bank customers, this study reveals that when there is a perfect match between strategic market orientation and value being perceived by its customers, a firm shall achieve strategy-value fit and realize optimal market outcomes in the form of customer satisfaction, acquisition, retention, cross-selling, and up-selling. Furthermore, a bank shall realize maximum level of m...

The customer lifetime value (CLV) is an important concept increasingly considered in the field of general marketing and in the management of firms, of organizations to increase the captured profitability. It represents the total value that a customer produces during his or her lifetime, or better represents the measure of the potential profit generating by a customer. The companies use the customer lifetime value to segment customers, analyze probability of churn, allocate resources or formulate strategies and, therefore, they increasingly derive revenue from the creation and from sustenance of long-term relationships with their customers. For this reason, the customer lifetime value is increasingly considered a touchstone for the management of customer relationships. In this article, the authors deepen the concept and use of customer lifetime value and present some mathematical models for its determination. There is many models for this purpose but most of them are theoretic, complex and not applicable. Though not exhaustive, the major contribution of this paper is that it provides a general mathematical formulation to estimate the CLV and that it has a context less specific compared to papers, present in literature, on the customer lifetime.

Recent studies in various economic sectors in the U.S.A., Brazil, China, South Korea, and Australia provide evidence of the precursors of customer equity (value, brand, and relationship equity) and their influence on behavior intentions and customer lifetime value (CLV). The aim of this study is to measure customer equity through CLV, design a model for CLV drivers and establish its predictive capacity in two samples obtained at different points in time. The sample comprises customers who have contracts with telecommunications operators in Spain, and the study uses a holdout sample to cross-validate the final sample. A predictive model, developed with partial least squares, analyzes the sector, and assesses the comparability of the four main competing companies. The findings support the importance of customer perceived value in building relationship quality and in brand equity, and reveal intentional loyalty as a precursor of future economic results.

An increasing number of products are equipped with software and sensors. This suggests that, in order to deliver more customised performance, future products will be developed to accommodate systems that supply information on how these products are used. Today, information on the customer’s way of using a product is seldom factored into product design, but the opportunities for making use of it are increasing dramatically due to the amount of available data that can be logged. The proposed methodology is to formulate Customer Needs at a detailed level to be able to link customer satisfaction with a clear interface to the Design Requirements. These links are obtained by combining information acquired by means of surveys, among other methodologies, as well as usage data from customer products. The method is based on the planning House of Quality and also takes cost and risk into consideration. Risk is estimated using the Analytical Hierarchy Process, whereby a hierarchy of the most relevant customer informa...

The consumer cooperative enterprise is becoming an increasingly noteworthy company form. Various forms of sharing economy and recent initiatives in collaborative consumption further amplify the relevance of a company form wherein the members have a dual role, acting both as owners and as customers. Today, cooperatives that are based on customer ownership can be found in banking, insurance, and retailing, where they account for about a trillion US dollars in annual revenue. Notwithstanding the relevance of cooperatives and their unique characteristics, which are partly contradictory within the framework of investor-owned firms, this company form and customer ownership itself have remained under-explored in consumer marketing research. Customer ownership may hold major implications for how customers ultimately perceive value, which, in turn, influences the very foundations for companies’ competitiveness: customer satisfaction, repurchase intention, and recommendation. Consequently, the purpose of this conceptual study is to uncover the value potential of customer ownership. As a result, a conceptual framework that addresses the value potential of customer ownership is proposed. In addition, the work identifies what kind of value customers can perceive through customer ownership and how that value can be defined and created in consumer cooperatives. The paper concludes with a discussion of both theoretical and managerial implications emerging from the value potential of customer ownership.

Whereas extant research on supply chain networks focuses mainly on the networks of major suppliers, this study fills a gap in the literature by exploring the relational and structural characteristics of networks of major customers and their impact on the financial performance of suppliers. Based on the major customer disclosure of the Statements of Financial Accounting Standards 131, this study identifies three dimensions of the major customer networks of U.S. public firms—customer concentration, mutual dependence and customer interconnection—and investigates how they affect the supplier's return on assets (ROAt+1) and return on sales (ROSt+1). Drawing on 717 suppliers and their major customer networks from the Compustat database, the study shows that customer concentration and interconnection negatively affect the supplier's ROAt+1 and ROSt+1, whereas mutual dependence enhances them and reduces the negative impact of customer concentration on the supplier's profitability. This positive interaction between customer concentration and mutual dependence demonstrates how two governance principles, power and embeddedness, simultaneously affect concentrated relationships with major customers.

Customer value is of importance to all businesses in the search for competitive advantage. To learn about what customers truly appreciate, measuring can be a vital source of information towards an understanding of what creates customer value. Commercial experiences are claimed to be an offering of their own, separate from goods and services. The existing tools and models for measuring customer value do not focus on the elements pointed out as vital for commercial experiences. A case study was performed on customers participating in a high-impact commercial experience to understand what is valuable to the customer. The results were used to develop an approach to measuring customer value specifically for commercial experiences. In the study, questionnaires were designed to find out about customer expectations before the experience compared with customer satisfaction after the experience in search for important factors of customer value. The study achieved a high score indicating a high level of received cus...

This research aimed to examine the impact of relationship marketing strategy on customer loyalty in Indonesia’s retail industries. A questionnaire derived from previous studies and the relevant literature was completed by 182 retail customers in Jakarta. Multiple regression analysis assessed the impact on customer loyalty of four key constructs of relationship marketing (trust, commitment, communication, and conflict handling). The two variables (trust and commitment) had a significant effect and predicted a good proportion of the variance in customer loyalty. Moreover, they were significantly related to one another. The relationships investigated in this study deserved further research. Since the data analyzed were collected from one sector of the service industry in one region, more studies were required before general conclusions can be drawn. It is reasonable to conclude, on this evidence, that customer loyalty can be created, reinforced, and retained by marketing plans aimed at building trust, demonstrating a commitment to service, communicating with customers in a timely, reliable and proactive fashion, and handling conflict efficiently, reinforces and refines the body of knowledge relating to customer loyalty in service industries.

Customers are regarded as the key intangible assets of a firm. Therefore, it is necessary for firms to have the capability to anticipate customer value. The study investigates the relationships among customer value anticipation, product innovativeness, and customer lifetime value from the customer's perspective. Empirical evidence from 178 MBA students shows that customer perceived customer value anticipation can significantly influence product innovativeness and the relationship is partially mediated by product innovativeness. In addition, both functional and emotional advertising are found to play a moderating role in the relationship between product innovativeness and customer lifetime value. The paper concludes with a discussion of the theoretical and managerial implications of the empirical study.

Postal enterprises are trying to succeed in a very competitive market. At present there are multiple ways to achieve this. One may succeed by offering quality innovative products, competitive prices, quality services etc. Customer orientation is also a trend of the present. In the past customers were considered en masse. In the present an individual approach to customer care is the current trend. This individual approach can be ensured by customer segmentation. The introduction of CRM will enable equal and individual approach to customers, however its implementation is time consuming and costly. Correctly designed customer segmentation that would be a part of primary activities of CRM value chain at the same time is a necessary condition for individual customer approach. This article deals with the new approach to customer segmentation in postal services. In the article will be described the basic approaches to customer segmentation and will be designed the advanced CRM model based on the multidimensional matrix.

Purpose Marketing/finance interface and application of its new insights in marketing decisions have recently found great interest among marketing researchers and practitioners. There is a relatively large body of marketing literature about incorporating modern portfolio theory (MPT) into customer portfolio context and taking advantage of it in marketing resource allocation decisions. Previous studies have modelled customer portfolio risk in the form of historical return/profitability volatility of customer base. However, the risk is a future-oriented measure, and deals with future volatility associated with return stream. This study aims to address this research problem. Design/methodology/approach The well-known Pareto/non-binomial distribution (NBD) approach is used to model customer purchases in a non-contractual setting of research practice. Then, the results were used to simulate the customers’ future buying behaviour and associated returns via the Monte Carlo simulation approach. Subsequently, the mean-variance portfolio optimization model was applied to find the optimal customer portfolio mix. Findings The results illustrated the better performance of the proposed efficient portfolio versus the current customer portfolio. These results are applicable in analyzing customer portfolio composition, and can be used as a guidance to make decisions about marketing resource allocation in different segments. Originality/value This study proposes a new approach to analyze customer portfolio by using the customers’ future buying behaviour. Taking advantage of rich marketing literature about statistical assumptions describing the customers’ buying behaviour, this study tries to take some steps forward in the application of the MPT theory in customer portfolio management context.

As the world economy grows rapidly, societies consume increasingly more resources. The unfortunate by-product of development is that environmental and living conditions are degrading. Consequently, sustainability is a burning issue. The study here focuses on customer perspectives regarding whether or not sustainable marketing activities are effective if they appeal to environmental, economic, or social dimensions. If so, such sustainable marketing activities are likely to, influence customer equity through word-of-mouth (WOM) and brand attitudes. Customer equity drivers can forecast future customer trends that affect customer lifetime value (CLV). Young consumers are very important because they will be the primary consumption group in the near future. Research about this group can forecast the consumption trends for companies. The study tests propositions in a cross-cultural context to learn how young Chinese and Korean consumers (college students) differ in their attitudes. SPSS and AMOS were use...

At the request of the Journal Editor and the author, the following article has been retracted. Koul, S., Sinha, P.K., & Mishra, H.G. (2016). Antecedents to customer dependency in buyer– seller relationship: A BOP retailer investigation. Global Business Review, 17(3), 610–629. DOI: 10.1177/0972150916630472 It was brought to the attention of the Editors and the Publisher that the article has some text and data issues. Upon further review, such errors were deemed to be significant enough to affect the reliability of the published research and the overall quality of the paper. Keeping such an article in public domain with high similarity index is not ethical and it was therefore decided to retract the article.

This article adopts the customer experience framework to find out how customer experience shapes customer satisfaction in the retail banking services. An empirical model using Total Interpretive Structural Modelling (TISM) technology is developed to summarize the factors of customer experience and to find the relationships and interrelationships of these factors which further leads to customer satisfaction. The results suggest that customer experience is driven by 14 factors: convenience, customer interaction, servicescape, employee’s attitude, online functional elements, presence of other customers, online hedonic elements, customization, core service, value addition, speed, marketing mix, service process and online aesthetics. In addition, the findings suggest that these factors directly or indirectly lead to customer satisfaction which further helps in building customer trust and customer loyalty. The article ends with a discussion of the managerial implications and future research directions.

PurposeTo enhance their competitive advantage, firms are increasingly regarding customer-perceived value as a vital factor in advancing the level of service performance. This paper aims to explore how supermarket retailers select and implement market orientation (MO) and service innovation strategies to enhance customer-perceived value based on their investment.Design/methodology/approachA review of the related literature indicated that studies have rarely explored the meanings and outcomes of MO and service innovation. Therefore, this paper examined the roles of MO and service innovation, evaluating how these factors affected relationship quality and customer-perceived value in a supermarket context. Customer advocacy and customer participation were evaluated as the mediating variables, and six hypotheses were formulated. The data were collected by conducting a questionnaire survey of the customers from five of the largest Taiwanese supermarket retailers. A structural equation model was used to test the hypotheses based on the respondent sample data.FindingsThe results indicated that customer participation and relationship quality are positively related to customer-perceived value. Customer advocacy is positively related to customer participation and relationship quality. MO and service innovation are positively related to customer advocacy.Research Limitations/implicationsThe high explanatory power of the results of the deduced model in this research help explain the MO and service innovation of supermarket retailers toward customers. However, the collection of data related to other retailers requires consumers in other countries to test the robustness of this theoretical model. The results of analyses conducted on other industries and in other countries may differ.Practical ImplicationsThis paper investigated how the MO and service innovation capabilities of supermarket retailers contributed to their customer advocacy to achieve superior customer participation, customer relationship quality and customer-perceived value.Originality/valueThis paper investigates the effect of MO and service innovation on relationship quality and perceived value, and regards customer advocacy and customer participation as mediators.

Based on the existing marketing concept on relational and functional benefits and on the retailing management of customer value, the present research empirically tests the influence of these customer benefits by providing a comparative analysis for different retailing formats, such as supermarkets and hypermarkets. Using questionnaire data for a sample of customers (N = 362), the authors developed structural equation modeling. This study identifies the factors influencing customer value, as well as the key to understand the relationships of customer benefits, customer value, loyalty, and purchase intention in the retailing service context. The contribution of the present research includes empirically testing a conceptual model, by developing a comparative analysis, along with providing some meaningful insights to retailing managers on how to strategically manage customer value variables to increase and enhance customer retention and purchase intent.

Based on the resource-based view and service-dominant logic, this paper tries to examine how the process of offering product-centric or knowledge-centric services can integrate heterogeneous resources so as to create customer perceived value. In product-centric service supply, the tangible product itself is central to the provision of an integrated set of services, while in knowledge-centric service supply, intangible knowledge is central to the provision of an integrated set of services. The effects of the two dimensions on customer perceived value are quite different. This paper examines the specific conditions under which these effects arise by highlighting the important role of customer involvement as a way of mobilizing resources between the supplier and the customer. It adopts a large sample survey in the Chinese fine chemical industry. The results show that the two kinds of service supply can yield short-term economic value and technical value to buyers. Long-term relational value, however, can only be achieved through the mediating role of short-term value and only if customers can acquire knowledge-centric services. In addition, the effect of knowledge-centric service supply on technical value is stronger if the customer has a greater rather than lower extent of involvement.

The more competition among industry participants severe, the more companies try to retain their customers and acquire new customers from their competitors. To gain competitive advantage, many companies are adopting and deploying more refined and sophisticated Customer Relationship Management systems. In the marketing area, a personalized marketing paradigm has already been infiltrated into our lives. To support personalized marketing, it is necessary to identify an individual customer’s true value. Various researches on customer value have conducted under the name of Customer Lifetime Value (CLV), Customer Equity, Customer Profitability, and LifeTime Value. In this paper we present issues of calculating individual customer’s lifetime value to deploy more personalized CRM activities. We propose a new method to calculate individual customer’s lifetime value dynamically. The feasibility of the suggested model is illustrated through a case study of the wireless telecommunication industry in Korea. Data mining techniques are used to predict lifetime value of a customer. Marketing implications will be discussed based on the result of individual CLV.