Denish Shah

The path to customer centricity

The concept of customer centricity and its benefits have been discussed for more than 50 years. Despite this fact, many firms are still struggling to fully align themselves to the customer-centric paradigm. This article identifies fundamental issues and challenges that typically deter a firm from becoming customer-centric. These are mainly related to the organizational culture, structure, processes, and financial metrics of the firm. To overcome these barriers, the article suggests a path to customer centricity that is driven by a strong leadership commitment, organizational realignment, systems and process support, and revised financial metrics. The article concludes with directions for further research.

Expanding the Role of Marketing: From Customer Equity to Market Capitalization.

Can a marketer drive the stock price of the firm? Yes, it should be possible. Toward this endeavor, the authors develop a framework to link customer equity (CE) (as determined by the customer lifetime value metric) to market capitalization (MC) (as determined by the stock price of the firm). The authors test the framework in an empirical field experiment with two Fortune 1000 firms in the business-to-business and business-to-consumer contexts, respectively. The findings show that (1) a CE-based framework can reliably predict the MC of the firm and (2) marketing strategies directed at increasing the CE not only increase the stock price of the firm but also beat market expectations. Furthermore, the results indicate that the relationship between CE and MC is moderated by risk factors in the form of volatility and vulnerability of cash flows from customers. By accounting for these factors, the authors improve the association between CE and MC. The findings broaden the scope and role of marketing while reinforcing the importance of the marketer to any organization.

Handbook of research on customer equity in marketing

Contents: Introduction: The Evolution of Customer Equity: From an important metric to a way of thinking and doing business V. Kumar and Denish Shah PART 1: UNDERSTANDING & MEASURING CUSTOMER EQUITY 1. Drivers of Customer Equity Roland T. Rust, James Kim, Yue Dong, Tom J. Kim, and Seoungwoo Lee 2. Aggregate-Level and Individual level Customer Lifetime Value V. Kumar and Anita Pansari 3. Simple Probability Models for Computing CLV and CE Peter S. Fader and Bruce G. S. Hardie 4. Incorporating Dynamics in Customer Lifetime Value Models Michael Lewis 5. The Value of Flexibility: Incorporating the (Real) Option of Firing a Customer Tomorrow into Todays Customer Lifetime Value Michael Haenlein PART II IDENTIFYING KEY DRIVERS TO AUGMENT CUSTOMER EQUITY 6. Managing Customer Loyalty for Maximizing Customer Equity Werner Reinartz and Maik Eisenbeiss 7. Leveraging Product Returns to Maximize Customer Equity J. Andrew Petersen and Eric T. Anderson 8. Word-of-Mouth and Marketing Effects on Customer Equity Dominique M. Hanssens, Julian Villanueva, and Shijin Yoo 9. The Power of Customer Referrals Robert P. Leone and Angeliki Christodoulopoulou PART III: APPLYING THE CUSTOMER EQUITY CONCEPT FOR ENHANCING FIRM PERFORMANCE 10. Customer Acquisition Strategies: A Customer Equity Management Perspective Kay Peters, Peter C. Verhoef, and Manfred Krafft 11. The Chain of Effects from Customer Satisfaction to Customer Profitability: Repairing Broken Connections Timothy L. Keiningham, Lerzan Aksoy, Yuliya A. Komarova, and Mohammad Nejad 12. Customer Lifetime Value Based Resource Allocation Rajkumar Venkatesan 13. Customer Mindset Metrics and Firm Performance Shuba Srinivasan PART IV: STRATEGIC MANAGEMENT OF CUSTOMER EQUITY 14. Risk Considerations in the Management of Customer Equity Ruth N. Bolton and Crina O. Tarasi 15. Co-Managing Brand Equity and Customer Equity Anita Luo, Donald R. Lehmann, Scott A. Neslin. 16. Opportunities and Threats from the Effects of New Technologies on Customer Equity Management Raji Srinivasan 17. Stop Grouping and Start Regulating - A New Approach to Social Media Marketing V. Kumar, Nandini Krishnamoorthy and Gayatri Shukla PART V: IMPLEMENTING CUSTOMER EQUITY IN FIRMS 18. Implementing Marketing Metrics in Organizations: Opportunities and Challenges Donald E. Sexton 19. Interaction Orientation and Complaint Handling: Implications for Building Customer Equity Girish Ramani & George Knox 20. Customer Equity Reporting Thorsten Wiesel and Bernd Skiera Conclusion: The Future of Customer Equity V. Kumar and Gayatri Shukla

Diagnosing Brand Performance: Accounting for the Dynamic Impact of Product Availability with Aggregate Data

The extent to which a brands individual products (relative to competing products) are available to consumers for purchase in a retail store can critically affect the brands overall performance. However, store-level product availability information is lost in aggregate market-level data sets and has been ignored by extant demand studies in general, which can create the risk of misinformed managerial decision making. In this research, the authors propose a unique methodology to enable manufacturers to infer retailers’ joint stocking probability of products from aggregate data and, thus, enable consumers’ choices to be contingent on the assortment of products available in retail stores. The application of the proposed framework in the context of an emerging market results in unbiased demand parameter estimates, a significantly better model fit, and richer managerial insights (compared with conventional approaches) pertaining to how brand performance is affected by the (1) dynamics of retailers’ stocking preferences, (2) assortment of products that retailers are more (vs. less) likely to jointly stock, and (3) cannibalization of retailers’ shelf space resulting from product line extensions.

Practice Prize Paper---Uncovering Implicit Consumer Needs for Determining Explicit Product Positioning: Growing Prudential Annuities' Variable Annuity Sales

A variable annuity is a popular product for investing retirement income. However, thousands of similar-looking variable annuity products are being offered by hundreds of financial service companies. In such a scenario, how can Prudential achieve meaningful product differentiation to increase the sales of its variable annuities? The solution led to the development and implementation of the “Emotion Quotient” (EQ) Tool. The EQ Tool enabled Prudential to redefine its marketing and sales approach along a proactive (as opposed to responsive) market orientation paradigm. This was accomplished by first using the EQ Tool to uncover and quantify the prevalence of certain emotions (such as fear and regret) in the prospective consumer and then pitching relevant variable annuity product(s) that could mitigate the specific behavioral risk corresponding to the prevalent emotion(s). This approach, which was backed by extensive research (as described in this study), enabled Prudential to gain over

Building and sustaining profitable customer loyalty for the 21st century

450 million lift in variable annuity sales and contributed to consumer welfare by promoting awareness of behavioral risk to investors who are within five years of their retirement. This research study illustrates how industry can collaborate with academia to successfully apply marketing science to solve real-world business problems.