Customer retention management processes: A quantitative study

Lawrence Ang & Francis Buttle (2006): Customer retention management processes, European Journal of Marketing, Vol. 40 Issue 1/2, p83-99. 17p. DOI: 10.1108/03090560610637329

Keywords Customer retention, Complaints

Ang, Lawrence and Buttle Francis explain the current state of importance given to customer retention and explore the management processes, businesses associate with. They examine the impact of customer retention planning, budgeting and accountability, and a documented complaints-handling process. They compare the significance of having a customer retention planning process and a documented complaints-handling process. They point to the existence of the latter as the strongest reason behind great customer retention.

  • At the start, authors mention customer retention goals are common in businesses with a focus on relationship marketing. They explore the current customer retention approach of different types of businesses. It is acknowledged that customer retention plays an important role in profit.
  • They conclude that a documented complaints-handling process enables businesses to improve problem resolution, and better identify trends and causes of complaints. Excellence at these processes improves customer’s residual value and prevent systemic or repetitive complaints.

Initially, they state that even a small increase in customer retention rate can improve customer net present value up to 95% in different types of businesses. Additionally, it is recognized that customer retention has more impact on the value of a business than changes in discounts rates or cost of capital. Industrial and service markets rely more heavily on customer management, being business-to-business relationships the most stable and lasting ones. Moreover, an excellent customer retention can also decrease customer replacement cost.

They identify that precise planning processes which involve obligations from executives and budgeting are linked to superior business performance, and over half of businesses believe customer retention to be more important than acquisition. They express that bad managing of customer churn leads to decrease in the business’ value. In addition, writers express that complainants whose issues were resolved have higher satisfaction rates and are less-likely to switch.

It is revealed by the writers that, despite the evidence of its importance, not enough attention is given to developing a proper customer retention plan. It is suggested that businesses either do not think about customer profitability or are unable to properly measure it. Conventional management approaches tell it is necessary to build a customer retention plan, implement a budget and provide accountability. Nevertheless, the authors did not find enough evidence to support this claim.

Finally, it is concluded that excellent customer retention is linked to the presence of a documented customer complaints-handling process, improving not only the customer retention but employee performance and business’ processes as well. A documented complaints-management process enables organizations to improve their ability to resolve customers’ disputes. It enables companies to identify trends more accurately and find factors generating problems. Organizations with well-established documented complaints-handling processes have a tendency to have explicit customer retention plans, use a formal switching model to predict churn, have an employee in charge of customer retention and look for signals of imminent customer defection yet, none of these variables are statistically significant for exceptional customer retention performance.

In conclusion, it is explained that customer retention plan, budget and accountability are not linked to a great customer retention, unlike common management approaches might suggest. Only documented complaints-handling processes showed a strong correlation with low customer churn.


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Exploring decisive factors affecting an organization’s SaaS adoption: A case study

Wu, Wei-Wen, Lan, Lawrence W. & Lee, Yu-Ting (2011): Exploring decisive factors affecting an organization’s SaaS adoption: A case study, International Journal of Information Management, Vol. 31, Issue 6, p.556-563. 6p. DOI: 10.1016/j.ijinfomgt.2011.02.007

Keywords: Software as a Service (SaaS), Adoption, Trust, Decision Making Trial and Evaluation, Laboratory (DEMATEL)

Wu, Wei-Wen, Lan, Lawrence W. & Lee, Yu-Ting start by defining cloud services as a group of service solutions involving computing, data storage, and software available through the Internet where customers do not own or operate the service provided. The cloud process all the information given by the user to then send back its results. This model allows organizations to focus on its core business and lessens the burden of developing and maintaining complicated IT systems.

Cloud computing can be divided into three categories: Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). Nevertheless, SaaS is regarded as potentially the most important model for scaling IT performance. Despite this information, organizations are still hesitant to use it due to trust concerns. It is stated that SaaS has an attractive growth potential as SMEs have yet to start using SaaS extensively. Among the reasons why it is not yet widely-spread in this segment, concern about data security represents the stronger factor. Therefore, focusing on trust to highlight perceived benefits and diminish perceived risks is the approach recommended for all marketing efforts. Nonetheless, adopting new technologies or services solutions is still commonly seen as a way to improve competitiveness in an organization.

Trust plays a decisive role in the acceptance of perceived benefits and the lessening of perceived risks for this business model. This is why, the authors propose a solution framework where they treat perceived benefits and perceived risks as two different arguments in order to develop a visible cause-effect graph to aid organizations in their decision making towards SaaS. They define trust as the willingness to behave risky in uncertain situations as it is believed that expected benefits might overcome the negative aspects.

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Integrating marketing communications: new findings, new lessons and new ideas

Rajeev Batra and Kevin Lane Keller (2016): Integrating Marketing Communications: New Findings, New Lessons, and New Ideas. Journal of Marketing, Vol. 80 Issue 6, p122-145. 24p. DOI:

Keywords: marketing communications, marketing integration, integrated marketing communications, traditional media, digital media

New media has impacted consumers in a drastic way, changing media usage patterns and disturbing how information is sought, where consumers look for it, and how the decide to choose a brand. Nowadays, increase of popularity in multitasking has led customers to a continuous state of partial attention. Consumers have a different dynamic when taking a decision to purchase due to search engines, blogs, brand websites, etc. These new tools lead consumers to actively seek information rather than passively receive it from traditional media.

The current situation has lead word-of-mouth and brand advocacy to be vital to current communication strategies, however, this has reduced marketer’s control over the information that arrives to customers. Nevertheless, these new trends improve personalization, content, location and timing of the communications and opens new possibilities for accomplishing their objectives as marketers have a wider selection of communication possibilities.

Due to the numerous communication channels, marketers must think about the message as well as the context of their communication or “interactive effects”. It is mentioned that there is interaction between new and old media such as TV, social media, mobiles, off-line word-of-mouth, etc.

To adapt to the new situation, the author proposes two communication models:

  1. “Bottoms-up” communication matching model: identifies communication options with the best ability to satisfy a customer at different stages of the consumer decision journey.
  2. “Top-down” communication optimization model: evaluates the design of a marketing communication program with relevant criteria to how it is integrated to short-term sales goals and long-term brand equity.

As for integrating marketing communications, two types of approaches are discussed. First, the micro approaches using consumer psychology and information processing principles to explore the impact of multi-media campaigns in different communication goals. Then, a second approach using econometric techniques to assess the effect of multi-media campaigns at brand-level. Additionally, consistency, complementarity and cross-effect among media and communication options are mentioned as the three most important factor for a successful integrated marketing communications program.

A new consumer decision journey circle is mentioned. The new concept begins by the consideration of an initial set of brands which the potential user forms a first consideration, then selects a brand based on this knowledge to finally, use the product or service and create post-purchase experiences that will shape future interactions with the brand.

Later, an analysis of each media and its impact on the effectiveness of the communication is discussed:

  • Traditional media: It is still relevant even today. It is mentioned that the message communicates is more important than repetition. Nevertheless, advertising effects vary on the channel used.
  • Newer online media includes:
    • Search ads: users who search for specific and less popular keywords are said to be closer to a purchase decision. Allowing paid search ads to potentially increase click-through rate and conversion rates
    • Display ads: This type of advertisement can increase visitation to business-websites for most users in the purchase funnel. Nevertheless, this has considerable less impact on potential customers who already visited the website but failed to engage.
    • Websites: This channel can be more effective when it matches its potential customer’s intellectual style. Additionally, age, gender and geographical location segmentation can also affect success.
    • E-mail: Increases purchases three more times than social media and personalization of said emails is shown to improve its effectiveness.
    • o Social Media: Brand-generated content can positively affect valence, receptivity and customer susceptibility. Nevertheless, social media must not focus on a single platform as this can lead to misleading brand sentiments.
    • Mobile: Users in this media tend to go directly to a brand’s website or app. Users also make more purchases driven by impulse than product features. Additionally, coupons and ads have shown to be the most effective when personalized to the user’s taste, location and time of the day.


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