Tolerating and Managing Failure: An Organizational Perspective on Customer Reacquisition Management

Arnd Vomberg*, Christian Homburg, Olivia Gwinner

*Corresponding author for this work

    Research output: Contribution to journalArticleAcademicpeer-review

    2 Citations (Scopus)
    45 Downloads (Pure)

    Abstract

    Although reacquiring customers can lead to beneficial outcomes, reacquisition processes are often unpleasant for employees, who may be required to admit and address failures. Because many organizational environments reward success and punish failure, companies need to understand how to create an organizational environment that stimulates customer reacquisitions. This study investigates the impact of failure-tolerant cultures and formal reacquisition policies on successful customer reacquisition management. Drawing on organizational design theory and psychological ownership theory, the authors find that failure-tolerant cultures have an inverted U-shaped effect on reacquisition performance because moderate failure tolerance increases reacquisition attempts while not inducing more failures or increasing their severity. Formal reacquisition policies, in contrast, have a positive linear relationship. Notably, formal reacquisition policies do not conflict with failure-tolerant cultures but enhance the beneficial effects of failure tolerance on reacquisition performance; formal reacquisition policies provide guidance for reacquisition attempts that failure-tolerant cultures inspire. Finally, results show that customer reacquisition performance is positively related to overall firm financial performance, a finding that emphasizes the managerial and organizational-level importance of reacquisition management.
    Original languageEnglish
    Pages (from-to)117-136
    Number of pages20
    JournalJournal of Marketing
    Volume84
    Issue number5
    Early online date30-Apr-2020
    DOIs
    Publication statusPublished - Sep-2020

    Keywords

    • culture
    • customer reacquisition
    • customer reacquisition policies
    • failure tolerance
    • marketing organization
    • marketing strategy
    • psychological ownership
    • PSYCHOLOGICAL OWNERSHIP
    • MARKET ORIENTATION
    • ERROR MANAGEMENT
    • WIN-BACK
    • PERFORMANCE
    • MOTIVATION
    • CULTURE
    • IMPACT
    • WORK
    • SPECIFICATION

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