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1 – 10 of 783Timothy Lee Keiningham, Bruce Cooil, Edward C Malthouse, Bart Lariviere, Alexander Buoye, Lerzan Aksoy and Arne De Keyser
There is general agreement among researchers and practitioners that satisfaction is relative to competitive alternatives. Nonetheless, researchers and managers have not treated…
Abstract
Purpose
There is general agreement among researchers and practitioners that satisfaction is relative to competitive alternatives. Nonetheless, researchers and managers have not treated satisfaction as a relative construct. The result has been weak relationships between satisfaction and share of wallet in the literature, and challenges by managers as to whether satisfaction is a useful predictor of customer behavior and business outcomes. The purpose of this paper is to explore the best approach for linking satisfaction to share of wallet.
Design/methodology/approach
Using data from 79,543 consumers who provided 258,743 observations regarding the brands that they use (over 650 brands) covering 20 industries from 15 countries, various models such as the Wallet Allocation Rule (WAR), Zipf-AE, and Zipf-PM, truncated geometric model, generalization of the WAR and hierarchical regression models are compared to each other.
Findings
The results indicate that the relationship between satisfaction and share of wallet is primarily driven by the relative fulfillment customers perceive from the various brands that they use (as gauged by their relative ranked satisfaction level), and not the absolute level of satisfaction.
Practical implications
The findings provide practical insight into several easy-to-use approaches that researchers and managers can apply to improve the strength of the relationship between satisfaction and share of wallet.
Originality/value
This research provides support to the small number of studies that point to the superiority of using relative metrics, and encourages the adoption of relative satisfaction metrics by the academic community.
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Lerzan Aksoy, Timothy L. Keiningham, Alexander Buoye and Joan Ball
The purpose of this paper is to identify the key drivers of share of wallet for credit cards issued by either a credit union (CU) or bank using a Wallet Allocation Rule (WAR…
Abstract
Purpose
The purpose of this paper is to identify the key drivers of share of wallet for credit cards issued by either a credit union (CU) or bank using a Wallet Allocation Rule (WAR) framework.
Design/methodology/approach
A survey approach engaging 1,649 current CU members at nine CUs regarding their use of 3,487 different credit cards is employed. Binary logistic regression is used to discriminate when CU issued vs bank issued credit cards are perceived to be “best” by their owners.
Findings
This research indicates the key drivers differ significantly when CU members prefer a CU-issued credit card vs a bank-issued credit card. For example, CU-issued credit cards are attractive to some CU members because of prior relationships with the CU and offering lower interest rates on revolving balances. By contrast, customers who choose a bank-issued credit card are much more likely to be driven by the rewards offered on the card.
Practical implications
Using the WAR key driver approach, managers can identify differentiating attributes that influence customers’ perceptions of their rank vis-à-vis competition and thereby grow share.
Originality/value
This research provides a significant contribution to both the banking literature and the scientific literature by examining the robustness of a relative metrics approach within the retail banking and CU market. It represents the first empirical analysis of a WAR key driver approach in the scientific literature.
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Absolute satisfaction ratings are widely used, but demonstrate a poor link to share of wallet, in part because this relationship is mediated and/or moderated by customer…
Abstract
Purpose
Absolute satisfaction ratings are widely used, but demonstrate a poor link to share of wallet, in part because this relationship is mediated and/or moderated by customer characteristics (including total spend in the category) and heterogeneity of scale usage. Relative satisfaction metrics, such as the Wallet Allocation Rule, have been shown to produce a much stronger link to share of wallet than absolute monadic ratings. This study compares absolute and relative satisfaction models after controlling for these mediating and moderating factors and re-examines the impact of these factors when using relative, rather than absolute metrics.
Design/methodology/approach
3,793 satisfaction ratings by 1,172 unique grocery customers across 5 countries (US, Brazil, Chile, France & Germany) are used to evaluate the mediating and moderating impacts of scale usage and customer characteristics on the relationship between satisfaction and share of wallet.
Findings
Relative metrics continue to significantly outperform absolute metrics after controlling for these factors. With the exception of the moderating influence of income, effects of customer characteristics and country differences are insignificant when linking relative satisfaction to share of wallet.
Practical implications
Managers need to re-evaluate their satisfaction measurement strategy in order to establish a strong link to actual behavior. While calculating relative satisfaction requires managers to collect data on competitors as well as the focal brand, this need for additional information is mitigated by a trade-off in terms of mediating and moderating information that is essential to properly model absolute metrics, but is not needed when using relative measures.
Originality/value
Provides a significant contribution to both retail literature and scientific literature in general by examining the robustness of a relative metrics approach within the grocery retail sector across a disparate collection of countries.
The purpose of this paper is to explore the role of emotions that consumers experience following service failures and to assess the effects of each of these emotions on important…
Abstract
Purpose
The purpose of this paper is to explore the role of emotions that consumers experience following service failures and to assess the effects of each of these emotions on important behavioral outcomes.
Design/methodology/approach
This paper extends the work of Wetzer et al. (2007) and draws upon the existing literature to test a series of research hypotheses tying emotions to four important behavioral outcomes primarily using stepwise regression.
Findings
When a service failure occurs, customers experience any of a variety of negative emotions. The effect on behavioral outcomes depends on the specific emotion experienced by the consumer. The current research, which benefits by using retrospective experience sampling, finds that frustration is the predominant emotion experienced by customers following service failure, but that anger, regret and frustration affect behavioral outcomes. Uncertainty also plays a role.
Research limitations/implications
Future research should investigate the antecedents of propensity for emotions and predisposition toward industries, as well as the consequences of word-of-mouth (WOM) praise and WOM activity. Additionally, emotions could be examined by service stage. Several other moderators could be investigated, including severity, complaining behavior, repeat occurrence, service importance, remedies and forgiveness, product vs process failures, tenure, gender and age.
Practical implications
The current research emphasizes the importance of understanding which emotion is being experienced by a customer following service failure to identify the behavioral outcomes that will be most impacted. The specific managerial implications depend upon the specific emotional response experienced by the customer and are discussed separately for anger, regret and frustration. Service personnel must be trained to recognize and address specific customer emotions rather than to provide a canned or generalized response.
Originality/value
To date, there has been little, if any, systematic research into the effects of multiple discrete negative emotions on multiple desirable behavioral outcomes. The current study examines six discrete emotions. Predominant emotions are differentiated from emotional intensity. The behavioral outcomes of reconciliation and reduced share-of-wallet are added to the traditional outcomes of repatronage intentions and negative WOM. While existing research tends to rely on a scenario approach, this study uses the retrospective experience sampling method. The authors distinguish between mixed emotions and multiple emotions. The relative effects of disappointment and regret are examined for each of the four outcomes. Finally, importance-performance map analysis was applied to the findings to prioritize managerial attention. Numerous managerial and research implications are identified.
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Marcel Paulssen and Raphael Roulet
Research on how social bonding between boundary spanners influences relationship outcomes in business-to-business (B2B) settings is sparse and controversial. This longitudinal…
Abstract
Purpose
Research on how social bonding between boundary spanners influences relationship outcomes in business-to-business (B2B) settings is sparse and controversial. This longitudinal study aims to close this gap and assess the impact of social bonding on the share of wallet and actual cross-buying behaviour.
Design/methodology/approach
B2B relationships between a manufacturer of light commercial vehicles and its customers were investigated. A random sample of fleet managers answered two telephone surveys.
Findings
Social bonding was found to affect both investigated relationship outcomes, share of wallet and cross-buying, through the generation of trust over and above the customer’s perceptions of value.
Research limitations/implications
Only one product category was investigated in this study, and further research should explore boundary conditions for the relevance of social bonding in B2B.
Practical implications
Social bonding represents one lever (next to value perceptions) for building a competitive advantage in a B2B context. Relationship marketing activities that are intended to strengthen the development of social bonds between customers and account managers should be encouraged.
Originality/value
The authors provide clear evidence regarding the disputed impact of social bonding between boundary spanners on relationship outcomes in B2B relationships by testing its impact on real purchase behaviour and not only purchase intentions, as is the case in most published studies to date.
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Despite the fact that customer satisfaction is among the most widely used metrics by managers, the link with share of deposits tends to be weak. Using a recent innovative approach…
Abstract
Purpose
Despite the fact that customer satisfaction is among the most widely used metrics by managers, the link with share of deposits tends to be weak. Using a recent innovative approach termed the “Wallet Allocation Rule (WAR)” this research investigates whether measuring satisfaction relative to other competitors used exhibits a stronger correlation to share of deposits compared to measuring absolute satisfaction with the focal firm/product.
Design/methodology/approach
A survey approach was used with a sample of 4,712 banking customers across the USA. Using the WAR, each respondent's satisfaction ratings were transformed into relative rankings and used to estimate their share of deposits.
Findings
The results confirmed that at both the individual and the aggregate level examining relative ranked satisfaction correlates strongly with customers’ share of deposits. At the individual level relative satisfaction explains 55 percent of the variance in share of deposits, as opposed to only 9 percent for absolute satisfaction.
Practical implications
The findings indicate that managers need to rethink their current approach to satisfaction measurement and consider measuring their customers’ satisfaction relative to competitors used. Furthermore, using aggregate level absolute satisfaction in managerial decision making can be misleading.
Originality/value
This research provides a significant contribution to both the banking literature and the scientific literature in general by examining the robustness of a relative metrics approach within the retail banking and credit union market.
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Timothy L. Keiningham, Bruce Cooil, Lerzan Aksoy, Tor W. Andreassen and Jay Weiner
The purpose of this research is to examine different customer satisfaction and loyalty metrics and test their relationship to customer retention, recommendation and share of wallet…
Abstract
Purpose
The purpose of this research is to examine different customer satisfaction and loyalty metrics and test their relationship to customer retention, recommendation and share of wallet using micro (customer) level data.
Design/methodology/approach
The data for this study come from a two‐year longitudinal Internet panel of over 8,000 US customers of firms in one of three industries (retail banking, mass‐merchant retail, and Internet service providers (ISPs)). Correlation analysis, CHAID, and three types of regression analyses (best‐subsets, ordinal logistic, and latent class ordinal logistic regression) were used to test the hypotheses.
Findings
Contrary to Reichheld's assertions, the results indicate that recommend intention alone will not suffice as a single predictor of customers' future loyalty behavior. Use of a multiple indicator instead of a single predictor model performs better in predicting customer recommendations and retention.
Research limitations/implications
The limitation of the paper is that it uses data from only three industries.
Practical implications
The presumption of managers when looking at recommend intention as the primary, even sole gauge of customer loyalty appears to be erroneous. The consequence is potential misallocations of resources due to myopic focus on customers' recommend intentions.
Originality/value
This is the first scientific study that examines recommend intentions and its impact on retention and recommendation on the micro (customer) level.
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Papassapa Rauyruen, Kenneth E. Miller and Markus Groth
A significant way of achieving high profitability is to retain existing customers who contribute to the service provider's revenue by continuously purchasing and paying more for…
Abstract
Purpose
A significant way of achieving high profitability is to retain existing customers who contribute to the service provider's revenue by continuously purchasing and paying more for products and services and building brand equity to the provider. The main objective of this study is to empirically examine and extend the knowledge underlying the linkage between service loyalty and brand equity performance outcomes in the context of business‐to‐business markets. It aims to develop and empirically test a theoretical model examining the antecedents and the outcomes of service loyalty in a business‐to‐business context. The model also aims to examine the relationship between service loyalty and customer share of wallet and price premium, as well as the links between the proposed antecedents (habitual buying, trust in the service provider, and perceived service quality) and service loyalty.
Design/methodology/approach
The theoretical model was empirically tested with a sample of 294 Australian small‐ to medium‐sized enterprises (SMEs), using online and paper‐and‐pencil surveys. Respondents were owners of SMEs, financial controllers, and managers who are decision‐makers in the selection and use of courier service providers for their businesses.
Findings
Findings provide support for the theoretical model in linking drivers of service loyalty with two types of loyalty, purchase intentions (i.e. behavioural loyalty) and attitudinal loyalty. Furthermore, the two types of loyalty are differential predictors of brand equity outcomes in that customer share of wallet is mainly driven by purchase intentions, whereas willingness to pay a price premium is mainly driven by attitudinal loyalty.
Originality/value
The paper examines the relationship between service loyalty and willingness to pay a price premium as one key indicator of brand equity.
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Stephanie Hui-Wen Chuah, Eugene Cheng-Xi Aw and Ming-Lang Tseng
The purpose of this study is threefold, which is as follows: investigate the mediating effect of brand fan page attractiveness on the relationship between user gratifications and…
Abstract
Purpose
The purpose of this study is threefold, which is as follows: investigate the mediating effect of brand fan page attractiveness on the relationship between user gratifications and customer engagement with brand fan pages, determine whether fan page agility moderates this effect and examine the influence of fan page engagement on customers' share of wallet and resistance to negative brand information.
Design/methodology/approach
By using an online questionnaire, 614 valid responses were obtained from the followers of multiple Facebook brand fan pages. Partial least squares-structural equation modelling (PLS-SEM) was used to analyse the data.
Findings
The results indicate that fan page attractiveness mediates the relationship between user gratifications and fan page engagement. However, this relationship is moderated by fan page agility. Fan page engagement increases customers' share of wallet and resistance to negative brand information. This finding suggests that creating fan page content and interactions that are attractive to customers is not sufficient for promoting engagement; brand fan pages must also be agile to customers' changing needs and competitors' moves.
Originality/value
By proposing and testing a novel moderated mediation effect, this study enriches the uses and gratifications theory (UGT) and provides new insights into the underlying mechanisms and boundary factors driving fan page engagement. In addition, this study contributes to the customer engagement literature by introducing share of wallet and resistance to negative brand information as outcome variables.
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The purpose of this paper is to determine if various measures of loyalty (satisfaction, continued patronage and share of wallet) converge or diverge. A related objective of the…
Abstract
Purpose
The purpose of this paper is to determine if various measures of loyalty (satisfaction, continued patronage and share of wallet) converge or diverge. A related objective of the study is to examine the relative efficacies of merchandise quality, interaction quality, price and store environment in inducing store loyalty for two customer segments of a national automotive parts and accessories retailer in the USA. The two segments are the do‐it‐yourself customers and the professional customers.
Design/methodology/approach
Data for the study are collected via mail questionnaires. Usable responses are obtained from 17,034 customers. In operationalizing store loyalty, affective, conative and action‐related measures are used.
Findings
The results altogether suggest that merchandise quality is an effective predictor of loyalty but perhaps not as critical or dominant as interaction quality. Results also show that similar factors consistently exert like influence in generating loyalty for the two customer segments.
Research limitations/implications
The efficacies of other antecedent variables (e.g. perceived value/value for money) as drivers of store loyalty should be examined. Also, it would be worthwhile to investigate the possible moderating role of demographic characteristics (e.g. gender) and situational characteristics (e.g. critical incident recovery) in attenuating the relationships between the antecedent variables and store loyalty.
Practical implications
To reinforce loyalty among its both do‐it‐yourself and professional customers, the focal retailer should continue to enhance the interaction skills of current and prospective employees via careful selection, training and motivation.
Originality/value
The paper shows that the three measures of loyalty (satisfaction, continued patronage and share of wallet) converge. The strongest correlations are between affective and conative loyalty.
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