J. Andrew Petersen

Forward-Looking Focus: Can Firms Have Adaptive Foresight?

Customer metrics are pivotal to assessing and monitoring how firms perform with customers and other publics. The authors contend that customer metrics used by firms today are predominantly rear-view mirrors reporting the past or dashboards reporting the present. They argue that companies need to and can develop “adaptive foresight” to be positioned to predict the future by exploiting changes in the business environment and anticipating customer behavior. They address the need for adaptive foresight by synthesizing and integrating literature on customer metrics, customer relationship management, customer asset management, and customer portfolio management. They begin by reviewing the metrics that have been and are currently being used to capture customer focus. Next, they discuss possible “headlight” or forward-looking customer metrics that would allow firms to anticipate changes and provide opportunities to increase the value of the customer base. They then identify the conditions under which the new metrics would be appropriate and offer a process for developing adaptive foresight. The authors close by discussing the implications of adaptive foresight for successful customer asset management that increases long-run business performance.

Perceived Risk, Product Returns, and Optimal Resource Allocation: Evidence from a Field Experiment

Relatively few retailers include metrics such as product returns in their customer selection and optimal resource allocation algorithms when measuring and maximizing customer value. Even when they do include this metric, increases in product return behavior are usually considered merely an economic cost that must be managed by decreasing the marketing resource allocations toward the customers making the returns. However, recent research has suggested that satisfactory product return experiences can actually benefit firms by lowering the customers perceived risk of current and future purchases. To better understand the role of this perceived risk in the firm–customer exchange process, the authors conduct a large-scale customer selection and optimal resource allocation field experiment with 26,000 customers from an online retailer over six months. They find that the firm is able to increase both its short-and long-term profits when accounting for the perceived risk related to product returns in addition to managing product return costs. Furthermore, the authors find that by including this risk, rather than simply implementing traditional customer lifetime value–based models generically, the firm can target more profitable customers.

Defining, Measuring, and Managing Business Reference Value.

It is common for business-to-business firms to use references from client firms when trying to influence prospects to become new customers. In this study, the authors define the concept of business reference value (BRV) as the ability of a clients reference to influence prospects to purchase and the degree to which it does so. They develop a three-step method to compute BRV for a given client using a retrospective reported measure of reference value. Next, they use data from a financial services and a telecommunications firm to identify and empirically test the drivers of BRV. These drivers fall into four categories: (1) length of client relationship, (2) client firm size, (3) reference media format, and (4) reference congruency. Next, the authors empirically show that clients that have the highest BRV are not the same as the clients that have the highest customer lifetime value. They also show that an average client that is high on BRV has significantly different characteristics from the average client that is low on BRV. Finally, they derive implications for managing BRV.

Domo Arigato Mr. Roboto: Emergence of Automated Social Presence in Organizational Frontlines and Customers’ Service Experiences

Technology is rapidly changing the nature of service, customers’ service frontline experiences, and customers’ relationships with service providers. Based on the prediction that in the marketplace of 2025, technology (e.g., service-providing humanoid robots) will be melded into numerous service experiences, this article spotlights technology’s ability to engage customers on a social level as a critical advancement of technology infusions. Specifically, it introduces the novel concept of automated social presence (ASP; i.e., the extent to which technology makes customers feel the presence of another social entity) to the services literature. The authors develop a typology that highlights different combinations of automated and human social presence in organizational frontlines and indicates literature gaps, thereby emphasizing avenues for future research. Moreover, the article presents a conceptual framework that focuses on (a) how the relationship between ASP and several key service and customer outcomes is mediated by social cognition and perceptions of psychological ownership as well as (b) three customer-related factors that moderate the relationship between ASP and social cognition and psychological ownership (i.e., a customer’s relationship orientation, tendency to anthropomorphize, and technology readiness). Finally, propositions are presented that can be a catalyst for future work to enhance the understanding of how technology infusion, particularly service robots, influences customers’ frontline experiences in the future.

Developing Donor Relationships: The Role of the Breadth of Giving

This research proposes a mechanism to develop long-term donor relationships, a major challenge in the nonprofit industry. The authors propose a metric, donation variety, which captures a donors breadth of donations with a given nonprofit organization, controlling for the distribution of donations to different initiatives. Using donation data spanning 20 years from a major U.S. public university, the authors find that improvements in donation variety increase the likelihood that the donor will make a subsequent donation, increase the donation amount, and reduce the sensitivity of donations to negative macroeconomic shocks. In the acquisition phase, most donors give to a single initiative, and these decisions are more influenced by a donors intrinsic motivations. In contrast, as the donor–nonprofit organization relationship develops over time, nonprofit marketing efforts have a more significant influence on a donors decision to give to multiple initiatives. Finally, the authors conduct a field study that validates the econometric analysis and provides causal evidence that marketing efforts by nonprofit organizations can encourage donors to spread donations across multiple initiatives.

Managing Product Returns Within the Customer Value Framework

Customers can create value to the firm by purchasing products, not returning these products, recommending products to other potential customers, influencing other customers, and providing feedback to the company. In this chapter, we first discuss how product returns and engagement behaviors can be included in the customer value framework. Second, we discuss the antecedents of a customer’s product return decision, namely, return policies, information at the moment of purchase, and customer and product characteristics. Third, we focus on the consequences of product returns: the effects on future purchase and product return behavior, as well as on customer engagement behaviors. Thus, this chapter provides a comprehensive synthesis of current knowledge on antecedents and consequences of product returns and how this relates to measuring and managing customer value.

Measuring and Managing Customer Engagement Value Through the Customer Journey

Customer engagement is a priority for practitioners and has garnered attention from academics as well. Research in this field has laid out the definitional foundation and has started to develop process models on the antecedents and consequences of customer engagement. We propose that customer engagement is a broad topic and intersects with several other established literature streams including customer experience, customer loyalty, and customer journeys. Insights from these fields are important to advance the theory of customer engagement. Combining the customer engagement and customer journey literatures, we propose a more execution-oriented approach to customer engagement research that can have a wider impact on practice.