When Acquisition Spoils Retention: Direct Selling vs. Delegation Under CRM

When Acquisition Spoils Retention: Direct Selling vs. Delegation Under CRM

Yan Dong, Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20850,

Yuliang Yao, College of Business and Economics, Lehigh University, Bethlehem, Pennsylvania Tony Haitao Cui, Carlson School of Management, University of Minnesota, Minneapolis

Mots clés : customer acquisition; customer retention; customer value; customer relationship management; incentive mechanism

Développement

Cet article met en avant différences que l’on rencontre entre l’acquisition client et la fidélisation. Cet article examine l’impact d’un effet négatif de l’acquisition sur la fidélisation. Cet effet négatif d’acquisition sur la fidélisation a un impact certain sur les efforts d’acquisition et de fidélisation, ainsi que sur le profit de l’entreprise concernée. Lorsque l’acquisition et la fidélisation sont indépendant, l’article nous apprend que les profits de l’entreprise sont plus élevés sous la vente directe, que sous une délégation.

Pendant des décennies, les entreprises ont centralisé leurs stratégies marketing sur l’acquisition client. Depuis 1980, elles se rendent petit à petit compte que recruter de nouveaux clients coûtaient plus cher que de fidéliser les clients existants. Elles ont alors décider de répartir les consommateurs en identifiant les consommateurs à forte valeur ajoutée, ayant pour objectif de ne pas les perdre. Ces efforts ont été soutenu par la création de logiciels d’aide à la relation clients, les logiciels de CRM. Ces derniers ont pour objectif l’acquisition client, et la fidélisation.

Le CRM aide fortement l’entreprise en lui fournissant un maximum de données sur ses prospects, et sur ses clients. L’acquisition et la fidélisation doivent se coordonner afin d’augmenter la rentabilité et le profit de l’organisation.

Cependant, ils peuvent parfois être en conflit. Augmenter les capacités de l’un risque de diminuer les performances de l’autre. L’étude faite et expliquée dans cet article met en avant deux structures possibles pour l’acquisition client : centralisée au ein de l’entreprise, ou bien déléguée.

Conclusion :

Ces deux entités extrêmement importantes dans une entreprise doivent se coordonner sans avoir négatif l’un sur l’autre. Les entreprises doivent indéniablement construire une stratégie adaptée à leurs objectifs ainsi qu’à leur structure. Lorsque les efforts diminuent en acquisition, ils ne sont forcément renforcés en fidélisation.

C’est ici que nait l’intérêt de l’importance de la connaissance clients au sein de l’entreprise, afin d’améliorer la stratégie marketing. La connaissance client permettra de mieux cibler en acquisition, et de mieux satisfaire les clients existants.

 

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Benefits of CRM Differentiated on the basis of customer lifetime value

 

ISSN 1407-7337 ECONOMICS AND BUSINESS 2009-7337

 BENEFITS OF CRM DIFFERENTIATED ON THE BASIS OF CUSTOMER LIFETIME VALUE

Hana Lošťáková : Professor, Ing., Ph.D. University of Pardubice, Faculty of Chemical Technology, Department of Economy and Management of Chemical and Food Industries, Studentská 95, 532 10 Pardubice, Czech Republic

Mots clés : CRM, Differentiated Care about Customers, Customer Life-time Value, Benefits of Differentiated CRM

La crise économique du XXIe siècle a conduit à de nombreux changements au sein des entreprises et notamment au sein de la relation client. Aujourd’hui les conommateurs peuvent trouver les biens et services dont ils ont besoin n’importe où. La demande est internationale et la demande l’est également. Acquérir et garder des clients est devenu de plus en plus difficile. Quelle que soit la qualité du produits, les consommateurs se gardent le droit de changer de fournisseurs, et sont de plus en plus difficiles à fidéliser car toujours à la recherche de comparaison pour profiter du meilleur prix.

Développement : 

Désormais, l’offre n’est plus la seule façon de fidéliser ses clients. Les entreprises doivent constamment innover dans leurs offres pour satisfaire un consommateur de plus en plus exigeant. Aujourd’hui nous pouvons affirmer que la survie d’une entreprise est entièrement liée à sa satisfaction client. Cette satisfaction client ne provient pas uniquement du produit seul. A travers cet article est mis en exergue l’indéniable différence qu’il existe entre la satisfaction client et la fidélisation.

La cible est de plus en plus restreinte à mesure que l’offre (et notamment médiatique) augmente. Aujourd’hui, il est possible de personnaliser l’offre à la demande du consommateur, et de construire une relation personnel avec ce consommateur.

« The augmented product involves the provision of benefits that support the purchase or consumption experience, but are not part of actual product. ». En effet, le produit en lui seul le suffit plus, les consommateurs attendent plus qu’un simple achat, même sur un site de prix discount.

Cet article nous présente les raisons de la nécessité absolue d’une stratégie CRM différenciante :

  • Crise économique et récession
  • Globalisation et internalisation des marchés.
  • Libéralisation et dérégulation de nombreuses industries.
  • Plus de possibilité de développer une relation avec les consommateurs.
  • Expansion des ordinateurs et des technologies de communication.
  • Accroître la présence de la marque auprès du consommateur et créer un réel lien.
  • Réaliser que la satisfaction client ne mène pas à la loyauté.
  • Fragmentation des médias.
  • La recherche permanente de valeur ajoutée client et d’avantages compétitif (ce qui est très dur à avoir).
  • Augmente dramatiquement la vitesse du business.

L’entreprise doit réellement accroître sa valeur ajoutée afin de donner à ses clients l’envie de revenir.

Conclusion :

Aujourd’hui le CRM, est un outil de différenciation absolument indispensable qui permet aux entreprises de se différencier. Dans un monde où la concurrence est de plus en plus présente et la demande de plus en plus exigeante, la différenciation à travers le CRM permet d’accroître toute l’efficacité du business. Il conduit a la plus haute satisfaction client, et donc, accroît leur loyauté.

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Brand followers: Consumer motivation and attitude towards brand communications on Twitter

Reference: Sook Kwon, S., Kim, E., Sung, Y., & Yun Yoo, C. (2014). Brand followers: Consumer motivation and attitude towards brand communications on Twitter. International Journal of Advertising, 33(4), 657-680

Summary:

Nowadays, with the rise of social media and social networking sites and applications, there is an importance of building and sustaining relationships with the customers, and is possible with the existence of social networking sites, such as Facebook and Twitter. It is now an advantage for brands to be present on social networking sites, and in this article the focus goes for one particular social networking site, Twitter. Twitter combines the social network sites, blogging, and text messaging, with the ability to follow brands, family, friends, companies, celebrities. People can also unfollow, recommend things or places, tweet about what are their thoughts of the day, re-tweet what others might have said and could also just be passive users and not contribute to any of the above mentioned. With more than 2oo million active users tweeting 400 million messages a day, nearly 90% of those users are brand followers on Twitter. This study revolves around twitter and it tries to identify the reason behind consumer’s motivation to follow brands on Twitter since consumer’s attitudes are always changing it is essential to keep up with their attitudes in order to have a relationship and sustain it. So the two main objectives behind this article are “identify and explore consumer motivation for following brands on Twitter, and determine how and which consumer motivation and attitudinal factors may affect the effectiveness of social media marketing on Twitter.

A survey of 400 brand followers on Twitter with an aim for this study to provide a baseline understanding of both motivation and relationship between identified motivations and key consumer-brand relationship variables including: “brand identification, brand community commitment, relationship continuance intention and brand recommendation intentions.” Moreover, what was found concerning the reasons behind people’s motivation to following a certain brand are four main reasons which are, incentive seeking, social-interaction seeking, brand usage/ likability, and information seeking. The latter three reasons were found to be significant predictors of the consumer-brand relationship variables.

Social media and human need satisfaction: Implications for social media marketing

Reference: Zhu, Y., Chen, H. (2015). Social media and human need satisfaction: Implications for social media marketing in Business Horizons, Article in press

Summary:

Social media has become an integral part of people’s lives whether they intentionally access social media platforms, or they come up as suggestions on phone applications or internet pop up sites. Moreover, it has become a tool for companies to communicate messages to their customers, so a B2C communication tool.

An increase of investments in advertising on social media platforms was what most US based companies did in order to stay connected to their customer and also attract potential customers’ and serve them better. However, studies have proven that most of these advertisements on social media platforms didn’t impact most of the consumers’ buying decisions and left people with negative feelings towards these ads. One of the main reason for that finding, is that people connect themselves on social media for the purpose of interacting with other people and finding long lost contacts from the past or maybe just to be entertained on the web, whereas, marketers’ main goal with their presence on  social media platforms, is to sell their products or services and persuade people to do so. There is no coherence between what the customers want and what the marketers have to offer them, and most of the time people ignore any advertisements provided to them on social media platforms. Marketers need to go deeper in understanding of why people connect on social media, and for what purposes, in order to create a need-congruent lens, meaning, to adapt people’s expectations and needs to what the company and the message conveyed on social media can offer. For this reason, this articles wants to answer the question: “what exactly are the needs behind these purposes and how should we use this knowledge for social media marketing?” To be able to answer this question,  two things must be taken into account: the type of messages posted by the person on his/her social media accounts and what basic human needs is answered and satisfied when a person is connected on social media, will help marketers identify the different needs conveyed by different people.

As mentioned in the article: “ social media marketing campaigns must help people satisfy their needs, whether this takes the form of building relationships, enhancing self-presentation, feeding self-esteem, finding solutions, or simply admiring beauty”. So this is a challenge most marketer face nowadays, to decide on the precise social media platform to be present on depending on the message they are trying to convey and the type of product or service they would like to present and make people aware of, and also to target the right people and answer all kinds of needs, from primary and basic to luxurious needs.

Enhancing the effects of social network site marketing campaigns. If you want customers to like you, ask them about themselves

Reference:  Van Noort, G., Antheunis, M.L., & Verlegh, P.W.J. (2014). Enhancing the effects of social network site marketing campaigns. If you want customers to like you, ask them about themselves in International Journal of Advertising, 33(2), 235-252

Summary:

Social networking sites (SNS) and social media platforms have become tools for marketers to be present on the internet and a reason to have a more personal relationship with their customers, or people who visit their page. Social networking sites are now not only platforms where people can connect to one another, but also used to promote brands, products and services. Interactive advertising campaigns can be defined as all forms of online, wireless and interactive television advertising, including banners, sponsorships, e-mail, keyword searches, and referrals, slotting fees, classified ads and interactive television commercials.

Here in this article, the main focus goes for the interactive advertising campaign on social networking sites (SNS) , and in this interactive advertising campaign three components make it up: the advertising, the campaign and the viral feature or the “tell a friend” feature. Benefits of social networking campaigns include creating brand engagement with the customers and page visitors, and gathering personal information on people in order to personalize further future marketing efforts to sustain the relationship with the customers. The main question that is asked in this article is: how consumers’ self-disclosing would breed linking for the brand?

Social networking sites campaigns are developed as interactive brand games so that people could relate and enjoy participating, and not feel like this is an obligation. Self-disclosure plays a central role in the development and the sustainability of relationships. When people disclose of personal information to other people, they unconsciously form a bond with that other person and a sense of liking. In comparison to the marketing context, and specifically in consumer brand-relationships the studies concluded and found that disclosing personal information to a brand in an online marketing campaign creates a feeling of ‘liking” towards the brand and even the intention to purchase as well as communicate to others and engage in word-of-mouth. “Disclosure enhances the virality of marketing campaigns and the willingness of people to share the campaign with others present in the same network.”

Digital marketing and social media: why bother?

Reference: Tiago, M.T.P.M.B., Veríssimo, J.M.C. (2014). Digital marketing and social media: why bother? Journal of Business horizons, 57,703-708

Summary:

Nowadays, we notice a difference in how consumer behavior was in the past, and what it consists of now, where people are more demanding and specific on their product or service needs. That is why marketers should follow the consumer behavior and keep up with the changes that are happening. It is not a question of the people connecting to the internet or not, it is more today a question of where are they connecting to? What are they looking for? And what interests them? However in this article the firm’s describe “their efforts in the digital marketing strategies”. It is up to the companies now to follow what interests their customer and try to adapt marketing strategies online to be able to answer to their needs.

A study was made on Portuguese companies, since internet adoption in Portugal has increased and people are now more connected to the virtual world via smartphones and mobile phones. The question asked in this article is to know “what are the main reasons for which companies are present in a digital form these days?” Many reasons behind that and the most important ones to mention are external competition, internal efficiency for the firm itself, and a facilitator for top-down directives. Not only it is important to be present online and virtually, but also it provides the company with additional benefits such as “customer support, easier market research, brand building, relationship building, and buzz marketing”. However, how do marketers measure their digital marketing effectiveness and evaluate what to do and what not to do? A cluster analysis was done in order to better answer the question out of which a digital engagement matrix was created to see the relationship between perceived benefits and digital marketing usage. Four profiles were suggested. “Engagement, Qualification, Discovery, and Dead-road.”

  •  “Engagement” is a mixture high investments in digital media usage as well as high perceived benefits and is referred to as interactive.
  •  “Qualification” also involves high investments in digital media, but has low expectations regarding its benefits and is referred to as “digital”. Moreover, –
  • “discovery” has weak digital marketing usage and low benefit perception. And finally,
  • “dead-road” reflects the “inefficiency of an unbalanced approach, high perceived benefits but low commitment to digital marketing”.

It is up to marketers to decide in which quadrant they want to be present in depending on how much they would like to invest and how much they perceive their benefits will be on the long term, keeping in mind the importance of the efforts which should “lead to increased engagement, stronger relationships with customers, and subsequent customer engagement”.

An organizational perspective on m-business: usage factors and value determination

Reference: Picoto, W.N., Bélanger, F., & Palma-dos-Reis, A. (2014). An organizational perspective on m-business: usage factors and value determination. European Journal of Information Systems, 23(5), 571-592

Summary:

Mobile technologies have become an essential part of individuals’ life, whether at work or in the comfort of their own homes. However, most studies are done to prove how mobile technologies have impacted the lives and changed the way people live and act, studies have ignored the fact that mobile phones have also touched the business and firms themselves, thus this study focuses more on the organizational context and organizational perspective on mobile business and analyses the value m-business can provide for firms.

Year after year, there is an increase in the purchase of smartphones, which means more and more people are connected on mobile services and this can also be seen as opportunities for business and opportunities for new digital marketing strategies, and thus the word “m- business” or mobile business.

What is highlighted in this article is the M-buisness unique value. Going further into detail, the mobile technologies unique features are its portability, its user identification, its localization, and its instant connectivity. Moreover, what the M-business can provide as unique value propositions is its ubiquity; the concept of anywhere, anytime. Also, its personalization, and its convenience. M-business can impact the business on many levels including and not limited to marketing and sales, internal operations, and procurement. In addition to that, with the technology-organization-environment framework or what is referred to in the article as TOE, diffusion of innovation theory and resource based theory as theoretical lenses, a proposed conceptual model is used to assess the post-adoption stages of usage and value of mobile business.

  • On the organizational level, the results provided important information about M-business fundamental values and “five new impacts were identified in the interviews: better information quality, improved employee learning, increased employee effectiveness, innovation incentive, and facilitating inventory management with the use of RFID technology.
  •  On the technological level, the RFID adoption was not surely a relative advantage for a certain company and it also highlighted that each person deals with technology on his or her own personal level. And finally, on the environmental level, “competitive pressure, partner pressure, and mobile environment are significant and positive antecedents of m-buisness usage.

 

When mobile is the norm: researching mobile information systems and mobility as post-adoption phenomena

Reference: Middleton, C., Scheepers, R., Tuunainen, V.K. (2014). When mobile is the norm: researching mobile information systems and mobility as post-adoption phenomena in European Journal of Information Systems, 23(5), 503-512

Summary:

The rise of mobile devices and use have increased drastically during the past 7 years, where mobile subscriptions today are estimated to be equal to the number of people on this planet, almost 7 billion subscriptions in 2014 versus 2.75 billion subscriptions in 2006. Mobile technology has become a way to interact with family, friends, share news, enjoy entertainment, and access information. Mobile access in 2011 had a different meaning of what it is today, where everything is now accessible and a click away. We note that mobile emergence first started with the GSM digital cellular standard and ever since, we had a transformation from mobile phones that provided text and phone to handheld devices that are known as smartphones and tablets which combine a series of functionalities other than sound and text such as: e-mail, instant messaging, social networks, note-taking, camera, flashlight, payment methods, location services and maps as well as games and entertainment applications. The term that his highlighted in this article is “UBIQUITY” which is the ability to be anywhere, anytime especially when referring and talking about mobile phones, smartphones, and tablets. Information systems that are used in mobile devices; smartphones and tablets, are shifting and developing their services and functionality. Nowadays, we talk about mobile entertainment as well as communication media and social networking and vehicle services where the use of smartphones is basically for navigation purposes and GPS and information on road conditions. Applications that have entered the smartphone and tablet world can be referred to as highly complex “micro information system” that integrate computing functionality with content.

When it comes to the mobile user himself/herself, what can be identified is that some users own more than one mobile device whether it is two smartphones, one smartphone and one tablet, or a work phone, a smartphone and a tablet. Users not only care about the functionality of these devices but also on the aesthetic aspect of design that encompasses their devices. The user identified in this article can be a private, social person. He can also be an employee, an entertainment user, a professional, a citizen, or even an activist, and each one of these characteristics define the way and how the user exercises “choice” and degree of usage by taking action to maximize usability of devices and ensure benefits from use. Some research questions that were asked in this article included and are not limited to:

  • How the infrastructure can be enhanced to enable IoT ( Internet of things)
  • How can persistent digital devices be addressed?
  • How can we increase accessibility to mobile networks and services for those who are currently not using them?

The context of use that were discussed in this article also became a central concern especially when reflecting on the multiple, and potentially overlapping roles of an individual and the potential overlapping contexts of mobile technology use. Some positive consequences of mobile use are apparent however some contradictions are highlighted as well. Moreover, mobile computing is enabling new behaviors flowing from the same individual as private, national, and global user. In addition to that, the global service providers are coming up with new ranges of services and applications and are clearly shaping the way individuals connect to each other, influence from each other and learn from each other. However, to each new invention its drawbacks, and in this case it is the deterioration of the traditional phone booth and landline as well as newspapers, bookstores, maps, and an increased invasion of privacy, identity theft and higher surveillance on the internet searches.

 

Mobile information systems and organizational control: beyond the panopticon metaphor?

Reference: Leclercq – Vandelannoitte, A., Isaac, H., Kalika, M. (2014). Mobile information systems and organizational control: beyond the panopticon metaphor? In European Journal of Information Systems, 23(5), 543-557

Summary:

The focus in this article is on organizational context and individuals as employees in the work place as well as outside the workplace. As mobile technology is innovating day after day, their uniqueness of being ubiquitous, meaning being present anywhere, anytime and easy to carry around, have made it easier to shift work to other places, anywhere and anytime whether at home, in the car, at the park. Connectivity, ease of carrying, exchanging information on the spot, getting in touch with people, all are many reasons why people work away from the office sometimes even after their usual working hours. However, for control reasons, this particular aspect makes it more challenging for higher level management to keep track on what is happening when people work outside the work premises because they somehow have to “follow” their employees outside of the workplace. A metaphor is used to portray the use of control in ancient times, the panoptic metaphor which illustrates the idea of a prison. The panopticon is a type of institutional building designed by the English philosopher and social theorist Jeremy Bentham in the late 18th century. The concept of the design is to allow a single watchman to observe all inmates of an institution without the inmates being able to tell whether or not they are being watched. Although it is physically impossible for the single watchman to observe all cells at once, the fact that the inmates cannot know when they are being watched means that all inmates must act as though they are watched at all times, effectively controlling their own behavior constantly. The main question asked in this article is: “can control systems in the mobile age be reduced to the Foucauldian panopticon or does the advent of mobile information systems herald the need for another model of social and political organization? Does the enactment of mobile information system in the work place support an extension of panoptic IT-based control systems, as might be enabled in enterprise systems, or does it include other logics of control?”

This paper investigates whether the way mobile information systems are engaged in the workplace reinforce panoptic control systems or generate other types of control logics. “This qualitative exploratory case study reveals the emergence of a subtle, invisible form of “free control” through mobile information systems: a shift in location of authority, a time-related discipline, a deep sense of trust, and adherence to organizational norms that the professionals themselves co-construct”. “Through the concept of free control, the study makes visible the invisible control logics that operate through mobile information systems and illustrates the dissolution of the boundaries between professional and private lives intentionally reinforced by the users”. A sense of trust between managers and employers was developed and people are now more productive than before when given the freedom to work from the comforts of their own homes. They take responsibilities of their actions and do the tasks as asked and answer when needed with the help of the all-time connectivity. So the adoption of the free control inside the organizations has shifted authority and observability and has created a sense of trust and co-operation between employers and employees and were able to dissolute the boundaries between higher level management and employees. However, one thing to keep in mind is the limitations this study offers since it was only done on a small company with a low level of formality, unlike most other companies who are bigger in employee size and have a more top down management style, rather than a flat line management style just like in the case of the company studied in this article which was referred to as “Bankco” to protect its confidentiality.

 

Media tablets for mobile learning

Reference: Kaganer, E., Giordano, G. A., Brion, S., Tortoriello, M. (2013). Media tablets for mobile learning in Communications of the ACM, 56(11), 68–75

Main idea: This article focuses on mobile learning and understanding how media tablets might influence key dimensions of learning by working professionals.

Smmary:

In this article, the main focus goes around the introduction of tablets in the year 2010, notably the iPad, and whether or not organizations should have the initiative to integrate the use of tablet in the everyday work life.

Nowadays, mobile learning is seen as a tool that has many benefits which facilitate the learning experience, making it more personalized, providing access to information with ease and creating a collaborative experience with others. A series of studies have been performed in the domain of higher education with a focus on undergraduates and graduates, whose working needs may differ from those of working professionals, in order to interpret the effects of mobile tablets on learning and if eventually they can be carried on and implemented in the workplace. The key question that was asked when the study was being carried out was “understanding of how media tablets might influence key dimensions of learning and collaboration by working professionals”.

The study was carried out at IESE Spain, with 124 students enrolled in the EMBA program. 62 of these students received iPads with all the documents needed in digital formats through the iPad, and 62 others who had hard copies and printed versions of these formats. The main focus of this study was to “understand the adoption and usage patterns of the mobile learning solution and their influence on key dimensions of learning outcomes, communication/collaboration, and team dynamics”.

After having conducted their experiments, many findings were identified, some of which were positive while the rest was relatively negative. Most students appreciated the fact that everything was easily accessible and downloaded, thus no need to carry around plenty of documents, in addition to that, they pointed out the efficient browsing and search tools which saved them time and confusion. Adoption and usage was positive in this aspect where most students relied on iPad to read their documents, and relied on iPad for qualitative courses more than quantitative courses such as finance where the preference was still to print out the documents since it was easier to skim through when solving exercise. Many implications are to be thought about and well- analyzed before integrating the use of tablets in the workplace. Although there were many positive feedback from the study that was held concerning learning through mobile tablets, many other findings seemed to have a negative effect on the overall learning experiences. For instance, iPads caused disruption in personal work habits and teamwork practices by shifting the learning curve.  Team collaboration was also affected in the way students were using the documents; some had them printed from the iPad, some others downloaded them on the pc and the rest used the iPads which didn’t show much consistency when coordinating work among team members.

As mentioned in the article, “mobile learning initiatives should be viewed as long term; expected benefits may not come quickly, and management must guide and support learners through the process of evolving their practice”. It is a challenging environment to work in and implement such devices and get consistent results, and that is why organizations should have a long term view with the necessary support systems to facilitate the transition to a mobile tabled- based world.