IDEAS home Printed from https://ideas.repec.org/a/eee/joinma/v51y2020icp44-56.html
   My bibliography  Save this article

Brave New World? On AI and the Management of Customer Relationships

Author

Listed:
  • Libai, Barak
  • Bart, Yakov
  • Gensler, Sonja
  • Hofacker, Charles F.
  • Kaplan, Andreas
  • Kötterheinrich, Kim
  • Kroll, Eike Benjamin

Abstract

In light of the emerging discourse on AI systems' effect on society, whose perception swings widely between utopian and dystopian, we conduct herein a critical analysis of how artificial intelligence (AI) affects the essential nature of customer relationship management (CRM). To do so, we survey the AI capabilities that will transform CRM into AI-CRM and examine how the transformation will influence customer acquisition, development, and retention. We highlight in particular how AI-CRM's improving ability to predict customer lifetime value will generate an inexorable rise in implementing adapted treatment of customers, leading to greater customer prioritization and service discrimination in markets. We further consider the consequences for firms and the challenges to regulators.

Suggested Citation

  • Libai, Barak & Bart, Yakov & Gensler, Sonja & Hofacker, Charles F. & Kaplan, Andreas & Kötterheinrich, Kim & Kroll, Eike Benjamin, 2020. "Brave New World? On AI and the Management of Customer Relationships," Journal of Interactive Marketing, Elsevier, vol. 51(C), pages 44-56.
    • Handle: RePEc:eee:joinma:v:51:y:2020:i:c:p:44-56
    DOI: 10.1016/j.intmar.2020.04.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1094996820300839
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.intmar.2020.04.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Upender Subramanian & Jagmohan S. Raju & Z. John Zhang, 2014. "The Strategic Value of High-Cost Customers," Management Science, INFORMS, vol. 60(2), pages 494-507, February.
    2. Ajay Agrawal & Joshua Gans & Avi Goldfarb, 2019. "Economic Policy for Artificial Intelligence," Innovation Policy and the Economy, University of Chicago Press, vol. 19(1), pages 139-159.
    3. Mark Aguiar & Mark Bils, 2015. "Has Consumption Inequality Mirrored Income Inequality?," American Economic Review, American Economic Association, vol. 105(9), pages 2725-2756, September.
    4. Eric M. Schwartz & Eric T. Bradlow & Peter S. Fader, 2017. "Customer Acquisition via Display Advertising Using Multi-Armed Bandit Experiments," Marketing Science, INFORMS, vol. 36(4), pages 500-522, July.
    5. Rust, Roland T. & Kumar, V. & Venkatesan, Rajkumar, 2011. "Will the frog change into a prince? Predicting future customer profitability," International Journal of Research in Marketing, Elsevier, vol. 28(4), pages 281-294.
    6. Thomas Piketty & Emmanuel Saez, 2014. "Inequality in the long run," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-01053609, HAL.
    7. Haenlein, Michael, 2013. "Social interactions in customer churn decisions: The impact of relationship directionality," International Journal of Research in Marketing, Elsevier, vol. 30(3), pages 236-248.
    8. Haenlein, Michael & Kaplan, Andreas M., 2009. "Unprofitable customers and their management," Business Horizons, Elsevier, vol. 52(1), pages 89-97.
    9. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    10. Arts, Joep W.C. & Frambach, Ruud T. & Bijmolt, Tammo H.A., 2011. "Generalizations on consumer innovation adoption: A meta-analysis on drivers of intention and behavior," International Journal of Research in Marketing, Elsevier, vol. 28(2), pages 134-144.
    11. Hartmann, Jochen & Huppertz, Juliana & Schamp, Christina & Heitmann, Mark, 2019. "Comparing automated text classification methods," International Journal of Research in Marketing, Elsevier, vol. 36(1), pages 20-38.
    12. Wertenbroch, Klaus, 2019. "From the Editor: A Manifesto for Research on Automation in Marketing and Consumer Behavior," Journal of Marketing Behavior, now publishers, vol. 4(1), pages 1-10, March.
    13. Decker, Reinhold & Trusov, Michael, 2010. "Estimating aggregate consumer preferences from online product reviews," International Journal of Research in Marketing, Elsevier, vol. 27(4), pages 293-307.
    14. Zauberman, Gal, 2003. "The Intertemporal Dynamics of Consumer Lock-In," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 30(3), pages 405-419, December.
    15. Roland T. Rust & Ming-Hui Huang, 2014. "The Service Revolution and the Transformation of Marketing Science," Marketing Science, INFORMS, vol. 33(2), pages 206-221, March.
    16. Kaplan, Andreas & Haenlein, Michael, 2020. "Rulers of the world, unite! The challenges and opportunities of artificial intelligence," Business Horizons, Elsevier, vol. 63(1), pages 37-50.
    17. Hoyer, Wayne D. & Kroschke, Mirja & Schmitt, Bernd & Kraume, Karsten & Shankar, Venkatesh, 2020. "Transforming the Customer Experience Through New Technologies," Journal of Interactive Marketing, Elsevier, vol. 51(C), pages 57-71.
    18. Tuck Siong Chung & Michel Wedel & Roland T. Rust, 2016. "Adaptive personalization using social networks," Journal of the Academy of Marketing Science, Springer, vol. 44(1), pages 66-87, January.
    19. Quentin André & Ziv Carmon & Klaus Wertenbroch & Alia Crum & Douglas Frank & William Goldstein & Joel Huber & Leaf Boven & Bernd Weber & Haiyang Yang, 2018. "Consumer Choice and Autonomy in the Age of Artificial Intelligence and Big Data," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 5(1), pages 28-37, March.
    20. Oded Netzer & Ronen Feldman & Jacob Goldenberg & Moshe Fresko, 2012. "Mine Your Own Business: Market-Structure Surveillance Through Text Mining," Marketing Science, INFORMS, vol. 31(3), pages 521-543, May.
    21. Xueming Luo & Siliang Tong & Zheng Fang & Zhe Qu, 2019. "Frontiers: Machines vs. Humans: The Impact of Artificial Intelligence Chatbot Disclosure on Customer Purchases," Marketing Science, INFORMS, vol. 38(6), pages 937-947, November.
    22. Muller, Eitan & Peres, Renana, 2019. "The effect of social networks structure on innovation performance: A review and directions for research," International Journal of Research in Marketing, Elsevier, vol. 36(1), pages 3-19.
    23. Laukkanen, Tommi, 2016. "Consumer adoption versus rejection decisions in seemingly similar service innovations: The case of the Internet and mobile banking," Journal of Business Research, Elsevier, vol. 69(7), pages 2432-2439.
    24. Gupta, Shaphali & Leszkiewicz, Agata & Kumar, V. & Bijmolt, Tammo & Potapov, Dmitriy, 2020. "Digital Analytics: Modeling for Insights and New Methods," Journal of Interactive Marketing, Elsevier, vol. 51(C), pages 26-43.
    25. Romana Khan & Michael Lewis & Vishal Singh, 2009. "Dynamic Customer Management and the Value of One-to-One Marketing," Marketing Science, INFORMS, vol. 28(6), pages 1063-1079, 11-12.
    26. Andrews, Michelle & Goehring, Jody & Hui, Sam & Pancras, Joseph & Thornswood, Lance, 2016. "Mobile Promotions: A Framework and Research Priorities," Journal of Interactive Marketing, Elsevier, vol. 34(C), pages 15-24.
    27. Blut, Markus & Frennea, Carly M. & Mittal, Vikas & Mothersbaugh, David L., 2015. "How procedural, financial and relational switching costs affect customer satisfaction, repurchase intentions, and repurchase behavior: A meta-analysis," International Journal of Research in Marketing, Elsevier, vol. 32(2), pages 226-229.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ma, Liye & Sun, Baohong, 2020. "Machine learning and AI in marketing – Connecting computing power to human insights," International Journal of Research in Marketing, Elsevier, vol. 37(3), pages 481-504.
    2. Carlson, Keith & Kopalle, Praveen K. & Riddell, Allen & Rockmore, Daniel & Vana, Prasad, 2023. "Complementing human effort in online reviews: A deep learning approach to automatic content generation and review synthesis," International Journal of Research in Marketing, Elsevier, vol. 40(1), pages 54-74.
    3. Huang, Ming-Hui & Rust, Roland T., 2022. "A Framework for Collaborative Artificial Intelligence in Marketing," Journal of Retailing, Elsevier, vol. 98(2), pages 209-223.
    4. De Bruyn, Arnaud & Viswanathan, Vijay & Beh, Yean Shan & Brock, Jürgen Kai-Uwe & von Wangenheim, Florian, 2020. "Artificial Intelligence and Marketing: Pitfalls and Opportunities," Journal of Interactive Marketing, Elsevier, vol. 51(C), pages 91-105.
    5. Rust, Roland T., 2020. "The future of marketing," International Journal of Research in Marketing, Elsevier, vol. 37(1), pages 15-26.
    6. Dawn Iacobucci & Maria Petrescu & Anjala Krishen & Michael Bendixen, 2019. "The state of marketing analytics in research and practice," Journal of Marketing Analytics, Palgrave Macmillan, vol. 7(3), pages 152-181, September.
    7. Roland T. Rust & Ming-Hui Huang, 2014. "The Service Revolution and the Transformation of Marketing Science," Marketing Science, INFORMS, vol. 33(2), pages 206-221, March.
    8. William Rand & Roland T. Rust & Min Kim, 2018. "Complex systems: marketing’s new frontier," AMS Review, Springer;Academy of Marketing Science, vol. 8(3), pages 111-127, December.
    9. Bitty Balducci & Detelina Marinova, 2018. "Unstructured data in marketing," Journal of the Academy of Marketing Science, Springer, vol. 46(4), pages 557-590, July.
    10. Pantano, Eleonora & Pizzi, Gabriele, 2020. "Forecasting artificial intelligence on online customer assistance: Evidence from chatbot patents analysis," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    11. de Bellis, Emanuel & Venkataramani Johar, Gita, 2020. "Autonomous Shopping Systems: Identifying and Overcoming Barriers to Consumer Adoption," Journal of Retailing, Elsevier, vol. 96(1), pages 74-87.
    12. Erik Hermann, 2022. "Leveraging Artificial Intelligence in Marketing for Social Good—An Ethical Perspective," Journal of Business Ethics, Springer, vol. 179(1), pages 43-61, August.
    13. Darima Fotheringham & Michael A. Wiles, 2023. "The effect of implementing chatbot customer service on stock returns: an event study analysis," Journal of the Academy of Marketing Science, Springer, vol. 51(4), pages 802-822, July.
    14. Yu Ding & Wayne S. DeSarbo & Dominique M. Hanssens & Kamel Jedidi & John G. Lynch & Donald R. Lehmann, 2020. "The past, present, and future of measurement and methods in marketing analysis," Marketing Letters, Springer, vol. 31(2), pages 175-186, September.
    15. Karen Ruckman & Nilesh Saraf & Vallabh Sambamurthy, 2015. "Market Positioning by IT Service Vendors Through Imitation," Information Systems Research, INFORMS, vol. 26(1), pages 100-126, March.
    16. Mahavarpour, Nasrin & Marvi, Reza & Foroudi, Pantea, 2023. "A Brief History of Service Innovation: The evolution of past, present, and future of service innovation," Journal of Business Research, Elsevier, vol. 160(C).
    17. Sven Heidenreich & Katrin Talke, 2020. "Consequences of mandated usage of innovations in organizations: developing an innovation decision model of symbolic and forced adoption," AMS Review, Springer;Academy of Marketing Science, vol. 10(3), pages 279-298, December.
    18. Kamoonpuri, Sana Zehra & Sengar, Anita, 2023. "Hi, May AI help you? An analysis of the barriers impeding the implementation and use of artificial intelligence-enabled virtual assistants in retail," Journal of Retailing and Consumer Services, Elsevier, vol. 72(C).
    19. Mariani, Marcello M. & Hashemi, Novin & Wirtz, Jochen, 2023. "Artificial intelligence empowered conversational agents: A systematic literature review and research agenda," Journal of Business Research, Elsevier, vol. 161(C).
    20. Benedict G. C. Dellaert, 2019. "The consumer production journey: marketing to consumers as co-producers in the sharing economy," Journal of the Academy of Marketing Science, Springer, vol. 47(2), pages 238-254, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joinma:v:51:y:2020:i:c:p:44-56. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-interactive-marketing/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.