Ruth N. Bolton

A model of customer satisfaction with service encounters involving failure and recovery

Customers often react strongly to service failures, so it is critical that an organizations recovery efforts be equally strong and effective. In this article, the authors develop a model of custom...

A DYNAMIC MODEL OF CUSTOMERS' USAGE OF SERVICES : USAGE AS AN ANTECEDENT AND CONSEQUENCE OF SATISFACTION

As firms seek ways to manage customer relationships over the long term, understanding the dynamics of the service provider–customer relationship becomes a key priority. In this article, the authors...

THE THEORETICAL UNDERPINNINGS OF CUSTOMER ASSET MANAGEMENT: A FRAMEWORK AND PROPOSITIONS FOR FUTURE RESEARCH

Most research in customer asset management has focused on specific aspects of the value of the customer to the company. The purpose of this article is to propose an integrated framework, called CUSAMS (customer asset management of services), that enables service organizations (1) to make a comprehensive assessment of the value of their customer assets and (2) to understand the influence of marketing instruments on them. The foundation of the CUSAMS framework is a careful specification of key customer behaviors that reflect the length, depth, and breadth of the customer-service organization relationship: duration, usage, and cross-buying. This framework is the starting point for a set of propositions regarding how marketing instruments influence customer behavior within the relationship, thereby influencing the value of the customer asset. The framework and propositions provide the impetus for a research agenda that identifies critical issues in customer asset management.

Customer-to-Customer Interactions: Broadening the Scope of Word of Mouth Research

The increasing emphasis on understanding the antecedents and consequences of customer-to-customer (C2C) interactions is one of the essential developments of customer management in recent years. This interest is driven much by new online environments that enable customers to be connected in numerous new ways and also supply researchers’ access to rich C2C data. These developments present an opportunity and a challenge for firms and researchers who need to identify the aspects of C2C research on which to focus, as well as develop research methods that take advantage of these new data. The aim here is to take a broad view of C2C interactions and their effects and to highlight areas of significant research interest in this domain. The authors look at four main areas: the different dimensions of C2C interactions; social system issues related to individuals and to online communities; C2C context issues including product, channel, relational and market characteristics; and the identification, modeling, and assessment of business outcomes of C2C interactions.

Marketing Actions and the Value of Customer Assets: A Framework for Customer Asset Management

This article develops a framework for assessing how marketing actions affect customers’lifetime value to the firm. The framework is organized around four critical actions that firms must take to effectively manage the asset value of the customer base: database creation, market segmentation, forecasting customer purchase behavior, and resource allocation. In this framework, customer lifetime value is treated as a dynamic construct, that is, it influences the eventual allocation of marketing resources but is also influenced by that allocation. By viewing customers as assets and systematically managing these assets, a firm can identify the most appropriate marketing actions to acquire, maintain, and enhance customer assets and thereby maximize financial returns. The article discusses in detail how to assess customer lifetime value and manage customers as assets. Then, it identifies key research challenges in studying customer asset management and the managerial challenges associated with implementing effective customer asset management practices.

Linking Marketing to Financial Performance and Firm Value

In January 2002, Donald R. Lehmann, Executive Director of the Marketing Science Institute, submitted a proposal for a JM Special Section, “Linking Marketing to Financial Performance and Firm Value.” The proposal included activities to promote interactions among marketing academics and practitioners, designed to advance research on this topic. I was excited about the opportunity to stimulate and publish new research, and after extensive discussions, the American Marketing Association and the Marketing Science Institute formally agreed to cosponsor the Special Section. Authors submitted their manuscripts through a paper competition as well as directly through JM. Donald R. Lehmann, the Consulting Editor, and a panel of distinguished scholars reviewed every submission. The panel included Tim Ambler, Gregory S. Carpenter, Robert Jacobson, V. Kumar, Roland T. Rust, and Rajendra K. Srivastava. All submissions underwent JMs standard double-blind review process under my editorship, and members of JMs Editorial Review Board served as reviewers. I am pleased to have this opportunity to acknowledge the important contributions of these many individuals: both authors and reviewers. As the subsequent essay suggests, three years’ hard work has produced a thought-provoking collection of articles. I hope they will generate further intellectual inquiry and debate about the link between marketing and financial performance in the business community.

Price-Based Global Market Segmentation for Services

In business-to-business marketing, managers are often tasked with developing effective global pricing strategies for customers characterized by different cultures and different utilities for product attributes. The challenges of formulating international pricing schedules are especially evident in global markets for service offerings, where intensive customer contact, extensive customization requirements, and reliance on extrinsic cues for service quality make pricing particularly problematic. The purpose of this article is to develop and test a model of the antecedents of business customers’ price elasticities of demand for services in an international setting. The article begins with a synthesis of the services, pricing, and global marketing literature streams and then identifies factors that account for differences in business customers’ price elasticities for service offerings across customers in Asia Pacific, Europe, and North America. The findings indicate that price elasticities depend on service quality, service type, and level of service support and that horizontal segments do exist, which provides support for pricing strategies transcending national borders. The article concludes with a discussion of the managerial implications of these results for effective segmentation of global markets for services.

Managing Customer Relationships

The customer relationship management (CRM) literature recognizes the long-run value of potential and current customers. Increased revenues, profits, and shareholder value are the result of marketing activities directed toward developing, maintaining, and enhancing successful company–customer relationships. These activities require an in-depth understanding of the underlying sources of value that the firm both derives from customers, as well as delivers to customers. We built our review from the perspective that customers are the building blocks of a firm. In order to endure long-term success, the role of marketing in a firm is to contribute to building strong market assets, including a valuable customer portfolio. CRM is an integral part of a company’s strategy, and its input should be actively considered in decisions regarding the development of organizational capabilities, the management of value creation, and the allocation of resources. CRM principles provide a strategic and tactical focus for identifying and realizing sources of value for the customer and the firm and can guide five key organizational processes: making strategic choices that foster organizational learning, creating value for customers and the firm, managing sources of value, investing resources across functions, organizational units, and channels, and globally optimizing product and customer portfolios. For each organizational process, we identify some of the challenges facing marketing scientists and practitioners, and develop an extensive

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.

Small details that make big differences : A radical approach to consumption experience as a firm's differentiating strategy

This is the authors’ accepted and refereed manuscript to the article. Publishers version is available at emeraldinsight.com