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Unlocking the power of marketing: understanding the links between customer mindset metrics, behavior, and profitability

Author

Listed:
  • J. Andrew Petersen

    (The Pennsylvania State University)

  • V. Kumar

    (Georgia State University
    Huazhong University of Science Technology
    Singapore Management University
    Indian School of Business)

  • Yolanda Polo

    (University of Zaragoza)

  • F. Javier Sese

    (University of Zaragoza)

Abstract

Recent evidence about the central role played by perceptual constructs in driving performance outcomes has produced a renewed interest in studying customer mindset metrics (CMMs; e.g., satisfaction, service quality, and loyalty intentions). However, we still lack a proper understanding of how (i.e., process) and to what extent (i.e., magnitude) these CMMs ultimately translate into profitability at the customer level. In this study, we integrate CMMs into an individual-level framework of customer behavior and profitability and provide a conceptual understanding of the process through which these metrics influence customer profitability. Specifically, we propose three mechanisms through which CMMs affect customer behavior and profitability: behavioral effect, marketing effectiveness effect, and marketing efficiency effect. We empirically test this framework across two distinct contexts, a B2B high-tech firm and a B2C telecommunications firm. The results demonstrate that these unobservable CMMs have a significant and multi-dimensional impact on customer behavior and customer profitability. Furthermore, we compute the increases in customer behavior and customer profitability that each firm can expect due to increases in CMMs to help firms improve resource allocation and make better decisions about how much (and when) to invest in CMMs.

Suggested Citation

  • J. Andrew Petersen & V. Kumar & Yolanda Polo & F. Javier Sese, 2018. "Unlocking the power of marketing: understanding the links between customer mindset metrics, behavior, and profitability," Journal of the Academy of Marketing Science, Springer, vol. 46(5), pages 813-836, September.
    • Handle: RePEc:spr:joamsc:v:46:y:2018:i:5:d:10.1007_s11747-017-0554-5
    DOI: 10.1007/s11747-017-0554-5
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    2. Agag, Gomaa & Durrani, Baseer Ali & Shehawy, Yasser Moustafa & Alharthi, Majed & Alamoudi, Hawazen & El-Halaby, Sherif & Hassanein, Ahmed & Abdelmoety, Ziad H., 2023. "Understanding the link between customer feedback metrics and firm performance," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    3. Omar. A. Alghamdi & Gomaa Agag, 2023. "Unlocking the Power of Reporting: Exploring the Link between Voluntary Sustainability Reporting, Customer Behavior, and Firm Value," Sustainability, MDPI, vol. 15(21), pages 1-18, November.
    4. Kohsuke Matsuoka, 2020. "Exploring the interface between management accounting and marketing: a literature review of customer accounting," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 31(3), pages 157-208, September.
    5. Mehrdad Memarpour & Erfan Hassannayebi & Navid Fattahi Miab & Ali Farjad, 2021. "Dynamic allocation of promotional budgets based on maximizing customer equity," Operational Research, Springer, vol. 21(4), pages 2365-2389, December.
    6. Rajkumar Venkatesan & Alexander Bleier & Werner Reinartz & Nalini Ravishanker, 2019. "Improving customer profit predictions with customer mindset metrics through multiple overimputation," Journal of the Academy of Marketing Science, Springer, vol. 47(5), pages 771-794, September.
    7. Munyaradzi W. Nyadzayo & Civilai Leckie & Lester W. Johnson, 0. "The impact of relational drivers on customer brand engagement and brand outcomes," Journal of Brand Management, Palgrave Macmillan, vol. 0, pages 1-18.
    8. Colicev, Anatoli & Kumar, Ashish & O'Connor, Peter, 2019. "Modeling the relationship between firm and user generated content and the stages of the marketing funnel," International Journal of Research in Marketing, Elsevier, vol. 36(1), pages 100-116.
    9. Pauwels, Koen & van Ewijk, Bernadette, 2020. "Enduring Attitudes and Contextual Interest: When and Why Attitude Surveys Still Matter in the Online Consumer Decision Journey," Journal of Interactive Marketing, Elsevier, vol. 52(C), pages 20-34.
    10. Ashish Sood & V. Kumar & Shaphali Gupta, 2023. "Modeling the antecedents of multi-generational services adoption behavior of clients across countries: The role of mindset metrics," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(9), pages 1661-1686, December.

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