Bart Larivière

Value fusion: The blending of consumer and firm value in the distinct context of mobile technologies and social media

Purpose: In this article, we introduce the concept of Value Fusion to describe how value can emerge from the use of mobile, networked technology by consumers, firms, and entities such as non-consumers, a firm’s competitors, and others simultaneously.Design/methodology/approach: We discuss the combination of characteristics of mobile devices that enable Value Fusion. We discuss specific value and benefits to consumers and firms of being mobile and networked. We introduce and define Value Fusion and set it apart from related, other conceptualizations of value. We provide examples of Value Fusion and discuss the necessary conditions for Value Fusion to occur. We discuss under which conditions the use of mobile, networked technology by consumers and firms may lead to Value Confusion instead of Value Fusion. We end with several research questions, proposed to further enhance the understanding and management of Value Fusion.Findings: The combination of portable, personal, networked, textual/visual and converged characteristics of mobile devices enables firms and consumers to interact and communicate, produce and consume benefits, and create value in new ways that have not been captured by popular conceptualizations of value. These traditional conceptualizations include customer value, experiential value, customer lifetime value, and customer engagement value. Value Fusion is defined as value that can be achieved for the entire network of consumers and firms simultaneously, just by being on the mobile network. Value Fusion results from producers and consumers (i) individually or collectively, (ii) actively and passively, (iii) concurrently, (iv) interactively or in aggregation contributing to a mobile network (v) in real time and (vi) just-in-time.Implications: Mobile devices have revolutionized the way we live, and there is widespread expectation that they will have “game- changing” implications for marketing in the near future (MSI, 2012). Therefore, research is needed to help us understand how mobile technologies are likely to change conventional wisdom about how customers and firms connect, interact and do business, and finally culminate in mutual, synergetic value; a phenomenon which we label Value Fusion.Originality: This paper synthesizes insights from the extant value literature that by and large has focused on either the customer’s or the firm’s perspective, but rarely blended the two. The contribution of this paper is that the Value Fusion concept achieves such a blending in the distinct context of mobile technologies and social media. Value should be considered more holistically, and value to the consumer and firm should be jointly optimized (i.e., Value Fusion) rather than managed in isolation. In addition, both active and passive participation should be valued. This paper calls for a more holistic approach to conceptualize value and identifies unanswered questions about value in the distinct context of mobile technology and social media.

A Meta-Analysis of Relationships Linking Service Failure Attributions to Customer Outcomes

When they experience service failures, customers look for causes. They seek to understand whether the service firm could have prevented the failure (controllability attribution) and whether the cause of the failure is temporary or constant over time (stability attribution). To understand such attributions, we perform a meta-analysis. We find that causal attributions are related to emotional and cognitive reactions in several ways. First, controllability attributions elicit stronger negative emotions than do stability attributions. Second, controllability attributions directly affect only transaction-specific satisfaction, whereas stability attributions directly affect customers’ transaction-specific and overall satisfaction. Third, both attributions affect loyalty and negative word of mouth through negative emotions, overall satisfaction, and transaction-specific satisfaction. Finally, contextual (i.e., cultural values), methodological (i.e., type of failure), and measurement factors (i.e., measurement scale) partly explain studywise variation in the effects of attributions on customer outcomes. We recommend that companies manage reactions to service failure thrice: before customers formulate attributional beliefs, using fast and accurate communication; when the attributional beliefs are formed, offering employee assistance and compensations; and well after the attributional beliefs are established, providing feedback on process improvements by the company.

Perceptions are relative: An examination of the relationship between relative satisfaction metrics and share of wallet

Purpose – There is general agreement among researchers and practitioners that satisfaction is relative to competitive alternatives. Nonetheless, researchers and managers have not treated satisfaction as a relative construct. The result has been weak relationships between satisfaction and share of wallet in the literature, and challenges by managers as to whether satisfaction is a useful predictor of customer behavior and business outcomes. The purpose of this paper is to explore the best approach for linking satisfaction to share of wallet. Design/methodology/approach – Using data from 79,543 consumers who provided 258,743 observations regarding the brands that they use (over 650 brands) covering 20 industries from 15 countries, various models such as the Wallet Allocation Rule (WAR), Zipf-AE, and Zipf-PM, truncated geometric model, generalization of the WAR and hierarchical regression models are compared to each other. Findings – The results indicate that the relationship between satisfaction and share o...

A longitudinal examination of customer commitment and loyalty

– This study aims to provide the first longitudinal examination of the relationship between affective, calculative, normative commitment and customer loyalty by using longitudinal panel survey data. , – Repeated measures for 269 customers of a large financial services provider are employed. Two types of segmentation methods are compared: predefined classes and latent class models and predictive power of different models contrasted. , – The results reveal that the impact that different dimensions of commitment have on share development varies across segments. A two-segment latent class model and a managerially relevant predefined two-segment customer model are identified. In addition, the results demonstrate the benefits of using panel survey data in models that are designed to study how loyalty develops over time. , – This study illustrates the benefits of including both baseline level information and changes in the dimensions of commitment in models that try to understand how loyalty unfolds over time. It also demonstrates how managers can be misled by assuming that everyone will react to commitment improvement efforts similarly. This study also shows how different segmentation schemes can be employed and reveals that the most sophisticated ones are not necessarily the best. , – This research provides the first examination of models for change in customer loyalty by employing survey panel data on the three-component model of customer commitment (affective, calculative, and normative) and considers alternative segmentation methods.

Service recovery's impact on customers next-in-line

Purpose – Previous research considers service recovery as a one-on-one interaction between a service provider and a complaining customer. However, customers frequently complain at the place where they receive the service, making an investigation of the impact of a service recovery on observing customers necessary. Using observational learning theory and attribution theory as theoretical anchors, this paper examines whether observing a service recovery influences the observing customers’ satisfaction and repurchase intentions. In addition, this paper tests whether service quality perceptions mediate, and customers’ locus of control attributions moderate these relationships. Design/methodology/approach – Study 1 tests the main hypothesis using a scenario-based experiment in two settings (restaurant, retail). Study 2 further elaborates on these findings using a scenario-based experiment in a hotel setting. Findings – The findings show that the negative consequences of a failed recovery extend beyond the comp...

How technical and functional service quality drive consumer happiness: Moderating influences of channel usage

Purpose - This study aims to investigate the impact of technical (i.e. what is delivered) and functional (i.e. how is it delivered) service quality on consumer happiness in a multichannel environment. In so doing, this study responds to increasing calls from academics (e.g. transformative service research movement) and practitioners to move beyond pure financial measures when deciding how to manage businesses. Design/methodology/approach - With a sample of 809 customers of a medium-sized Belgian mail order firm, within-class regression models tested for the moderating role of channel usage. Findings - Both technical and functional service quality have positive impacts on consumer happiness. However, depending on the channel(s) used, the quality dimension that has the greatest impact on consumer happiness differs. Practical implications - The findings offer managers insights on how they can create and cultivate consumer happiness by delivering excellent service quality. This study stresses the importance of looking beyond purely financial measures to manage firms, and as such deliver value to consumers, the firm itself and society at large. Originality/value - This study advances transformative service research by being one of the few empirical studies relating service quality to consumer happiness in todays multichannel environment.

Modeling Heterogeneity in the Satisfaction, Loyalty Intention, and Shareholder Value Linkage: A Cross-Industry Analysis at the Customer and Firm Levels

This study examines the relationship between customer satisfaction, loyalty intention, and shareholder value at the firm and individual customer levels. The authors also explore industry differences by using a multilevel and random-effects approach in which individual customer scores are nested within firm-level data and the estimated interrelationships are treated as random coefficients that are explained by industry characteristics. They compile a unique and detailed data set, which covers 10 years of information on 137 firms and includes a matched sample of 189,069 customers from multiple sources, such as the American Customer Satisfaction Index, the Center for Research in Security Prices, and Compustat, to yield three important insights. First, aggregate firm-level effects may overestimate the impact that satisfaction has at the individual customer level. Second, a consideration of loyalty intention or repurchase intention as the mediator can improve our understanding of the satisfaction–shareholder value relationship and the fact that this relationship can vary across firms. Finally, the influence of satisfaction and loyalty intentions on shareholder value varies by industry. The authors discuss implications of findings for researchers, managers, and investors.

Does Satisfaction Matter More If a Multichannel Customer is Also a Multicompany Customer

Purpose – Although the influence of using multiple channels on customer behavior has been investigated, most of this research has focused on channel behavior within a single company. Customers however frequently have access to multiple providers amongst which they can choose to allocate their spending in a category. Prior research therefore has neglected to understand what happens when a multichannel customer also chooses to conduct business with multiple companies. This research investigates the moderating influence of both multichannel and multicompany usage on the impact that customer satisfaction has on share of wallet (SOW). Design/methodology/approach - The data used in the analyses was collected as part of both survey and transactional data of 802 households of a large financial services provider. Within class regression models were employed to test the moderating effects of different segments that were identified based on multichannel-multicompany customer differences. Findings – The findings confirm that using multiple channels has an overall positive moderating impact on the satisfaction – SOW link and that customer satisfaction matters more when the customer adopts multiple channels; online channel usage in addition to offline usage. Furthermore, this effect is even more pronounced for customers that transact with multiple providers. That is, the group of customers that use both the company’s and competitors’ offline and online channels reveal a higher satisfaction - SOW association than the group of customers that only adopted the offline channel with the company and competitor. Research limitations/implications – The limitation is that this research examines a single industry. The results however clearly show the need for future research to account for both multichannel and multicompany differences to fully understand the effect of customer satisfaction on share of wallet. Originality/value – There are two major differences of the paper compared to what has already been done in the literature: (1) It examines the impact of both multichannel and multicompany usage, which has never been investigated before; (2) It examines the moderating impact of these variables on the satisfaction - behavior link / relationship as opposed to the direct effect on satisfaction or behavior separately or in isolation. This research also provides important managerial guidance on the need to capture customers’ multicompany preferences and how to more efficiently allocate budgets in creating satisfaction with the goal of ensuring higher share of spending by taking on a more targeted approach.

Customer intentions to invoke service guarantees: Do excellence in service recovery, type of guarantee, and cultural orientation matter?

Purpose – Many service providers feel confident about their service quality and thus offer service guarantees to their customers. Yet service failures are inevitable. As guarantees can only be invoked when customers report service failures, firms are given the opportunity to redress the original failure potentially influencing customer outcomes. The purpose of this paper is to provide the first empirical investigation of whether excellence in service recovery affects customers’ intentions to invoke a service guarantee, thereby discriminating between conditional and unconditional guarantees and testing for the impact of customers’ individualistic vs collectivistic cultural orientation. Design/methodology/approach – In total, 171 respondents from four continents (spanning 23 countries) were recruited to participate in a quasi-experimental study in a hotel setting. A three-way analysis of variance was used to test the hypotheses. Findings – All customers are very likely to invoke the service guarantee after ...

Banking behaviour after the lifecycle event of moving in together : An exploratory study of the role of marketing investments

This study addresses an important issue for both managers and researchers: whether it is advantageous for financial services providers to invest in youth marketing. More specifically, the effectiveness of these investments is evaluated in terms of retention proneness once youngsters enter the lifecycle event of “moving in together”. The study identifies eight constructs of youth marketing and contrasts their impact against the best deal when youngsters decide to move in together and consequently experience the need to buy their first collectivized financial products, such as a joint account or a mortgage for their new home. Furthermore, the influence of the partner, prior patronage behaviour, customer demographics and psychographic variables are tested for. The findings of the study reveal that (i) individuals are likely to change their banking behaviour during crucial lifetime events such as moving in together, (ii) not all youth marketing investments are equally effective, while (iii) the best deal components (e.g. convenience, price conditions, etc.) have a major impact.