TY - UNPB
T1 - Should they stay or should they go? Reactivation and termination of low-tier customers
T2 - Effects on satisfaction, word-of-mouth, and purchases
AU - Blömeke, E.
AU - Clement, M.
AU - Bijmolt, T.H.A.
N1 - Relation: http://www.rug.nl/
Rights: University of Groningen
PY - 2010
Y1 - 2010
N2 - Many companies face the problem of having a substantial number of low-tier customers – clients at the bottom of the customer pyramid. For this segment, it is necessary to either reactivate or terminate the customer relationships to increase profitability. Managers seek to learn more about marketing actions targeted towards low-tier customers and their response towards these actions. Therefore, we conducted a large field experiment in which we implemented a “last call” marketing action for a large sample of low-tier customers of a catalogue retailer (N = 12,000). The action aims at sales reactivation, but in case a customer should not react, the relationship will be terminated. We measure customer response in terms of satisfaction, (positive and negative) word-of-mouth, and purchase behavior. We find no harmful effects from relationship termination, such as dissatisfaction or negative word-of-mouth. The results indicate that the “last call” marketing action reactivates a small fraction of the low-tier customers. These customers remain active in the months following the action period. We discuss managerial implications of our findings and future research on low-tier customer segments.
AB - Many companies face the problem of having a substantial number of low-tier customers – clients at the bottom of the customer pyramid. For this segment, it is necessary to either reactivate or terminate the customer relationships to increase profitability. Managers seek to learn more about marketing actions targeted towards low-tier customers and their response towards these actions. Therefore, we conducted a large field experiment in which we implemented a “last call” marketing action for a large sample of low-tier customers of a catalogue retailer (N = 12,000). The action aims at sales reactivation, but in case a customer should not react, the relationship will be terminated. We measure customer response in terms of satisfaction, (positive and negative) word-of-mouth, and purchase behavior. We find no harmful effects from relationship termination, such as dissatisfaction or negative word-of-mouth. The results indicate that the “last call” marketing action reactivates a small fraction of the low-tier customers. These customers remain active in the months following the action period. We discuss managerial implications of our findings and future research on low-tier customer segments.
KW - catalogue retailing
KW - customer reactivation
KW - relationship termination
KW - low-tier customer segment
KW - customer relationship management
M3 - Working paper
VL - 10008
T3 - SOM Research Reports
BT - Should they stay or should they go? Reactivation and termination of low-tier customers
PB - University of Groningen, SOM research school
CY - Groningen
ER -