This study draws on depth interviews with 49 managers in customer firms and 55 managers in supplier firms and on discussions with 21 managers in two focus groups to propose a new way of thinking about customer solutions. Extant literature and suppliers interviewed for this study view a solution as a customized and integrated combination of goods and services for meeting a customer's business needs. In contrast, customers view a solution as a set of customer–supplier relational processes comprising (1) customer requirements definition, (2) customization and integration of goods and/or services and (3) their deployment, and (4) postdeployment customer support, all of which are aimed at meeting customers' business needs. The relational process view can help suppliers deliver more effective solutions at profitable prices. In addition, field research suggests that the effectiveness of a solution depends not only on supplier variables but also on several customer variables. Supplier variables include contingent hierarchy, documentation emphasis, incentive externality, customer interactor stability, and process articulation. Customer variables include adaptiveness to supplier offerings and political and operational counseling that a customer provides to a supplier. Several of these variables underscore the importance of suppliers developing social capital with customers. The authors discuss implications for solution suppliers and identify areas for further research.
Monday, 11 August 2014
To understand mechanisms that govern the productivity and quality of frontline employees (FLEs), this study (1) provides a conceptual distinction between frontline productivity and quality, (2) proposes an extended role theory-based model for mapping the influence of key antecedents and consequences of FLE productivity and quality, and (3) examines the effects of coping resources—boss support and task control—in helping employees cope with the inherent productivity-quality tension in frontline jobs. Using data from 159 customer service and 147 bill collection representatives, the author examines proposed hypotheses through multiple-group path analysis. The results indicate support for the distinction between productivity and quality. Moreover, with increasing burnout levels, FLEs are found to maintain their productivity levels while their quality deteriorates directly. Relative to boss support, task control emerges as a more powerful resource in aiding FLEs in coping with role tension. Key implications for theory and practice regarding FLE management and effectiveness are discussed.
The authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change in a firm’s customer equity relative to the incremental expenditure necessary to produce the change. The change in the firm’s customer equity is the change in its current and future customers’ lifetime values, summed across all customers in the industry. Each customer’s lifetime value results from the frequency of category purchases, average quantity of purchase, and brand-switching patterns combined with the firm’s contribution margin. The brand-switching matrix can be estimated from either longitudinal panel data or cross-sectional survey data, using a logit choice model. Firms can analyze drivers that have the greatest impact, compare the drivers’ performance with that of competitors’ drivers, and project return on investment from improvements in the drivers. To demonstrate how the approach can be implemented in a specific corporate setting and to show the methods used to test and validate the model, the authors illustrate a detailed application of the approach by using data from the airline industry. Their framework enables what-if evaluation of marketing return on investment, which can include such criteria as return on quality, return on advertising, return on loyalty programs, and even return on corporate citizenship, given a particular shift in customer perceptions. This enables the firm to focus marketing efforts on strategic initiatives that generate the greatest return.
The work draws upon the results of an ongoing research project which is investigating the use of new technologies by entrepreneurial businesses in the London area. A range of examples from our 30 case study businesses are drawn upon to illustrate some of the opportunities and threats associated with these new marketing priorities.
We conclude that social networks will play a key role in the future of marketing; externally they can replace customer annoyance with engagement, and internally they help to transform the traditional focus on control with an open and collaborative approach that is more conducive to success in the modern business environment.
Research limitations/implications –
Further research should aim to track this activity as it integrates with more mainstream marketing over time.
Practical implications –
Developments in the technologies themselves, as well as a reduction in costs, will mean that more and more information will be available to consumers. This results in unprecedented levels of transparency of dealings between businesses and their customers. A key challenge when engaging customers through these social networks is how to give away power and control while at the same time avoiding embarrassment to the company.
The paper provides practical guidance on the opportunities and threats associated with marketing through social networks, based on lessons learned from “early adopters”.
Monday, 21 July 2014