IDEAS home Printed from https://ideas.repec.org/a/eee/joinma/v28y2014i3p210-224.html
   My bibliography  Save this article

For New Customers Only: A Study on the Effect of Acquisition Campaigns on a Service Company's Existing Customers' CLV

Author

Listed:
  • Lhoest-Snoeck, Sietske
  • van Nierop, Erjen
  • Verhoef, Peter C.

Abstract

This study examines the effect of attractively priced acquisition campaigns on retention intention, and subsequently CLV, of existing customers. The main finding is that customers who are aware of the acquisition campaigns both have a significantly higher intention to stay and do actually stay longer than do customers who are unaware of these campaigns. However, since CLV is not only influenced by retention intention but also by revenues and costs, it is found that aware customers do not have a significantly different CLV than do unaware customers. The inclusion of attractiveness of the offer as an additional explanatory variable results in a positive effect of campaign attractiveness on retention intention, i.e. if the customer thinks the acquisition campaign is attractive, the retention intention will be higher. However, the effect that is found for intention cannot be directly translated in actual behavior.

Suggested Citation

  • Lhoest-Snoeck, Sietske & van Nierop, Erjen & Verhoef, Peter C., 2014. "For New Customers Only: A Study on the Effect of Acquisition Campaigns on a Service Company's Existing Customers' CLV," Journal of Interactive Marketing, Elsevier, vol. 28(3), pages 210-224.
    • Handle: RePEc:eee:joinma:v:28:y:2014:i:3:p:210-224
    DOI: 10.1016/j.intmar.2014.02.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1094996814000164
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.intmar.2014.02.004?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. Berger, Paul D. & Bechwati, Nada Nasr, 2001. "The allocation of promotion budget to maximize customer equity," Omega, Elsevier, vol. 29(1), pages 49-61, February.
    2. Arkes, Hal R. & Kung, Yi-Han & Hutzel, Laura, 2002. "Regret, Valuation, and Inaction Inertia," Organizational Behavior and Human Decision Processes, Elsevier, vol. 87(2), pages 371-385, March.
    3. Oliver, Richard L & Swan, John E, 1989. "Equity and Disconfirmation Perceptions as Influences on Merchant and Product Satisfaction," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(3), pages 372-383, December.
    4. Claes Fornell & Birger Wernerfelt, 1988. "A Model for Customer Complaint Management," Marketing Science, INFORMS, vol. 7(3), pages 287-298.
    5. Eric van Damme, 2005. "Liberalizing the Dutch Electricity Market: 1998-2004," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 155-180.
    6. 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.
    7. Bas Donkers & Peter Verhoef & Martijn Jong, 2007. "Modeling CLV: A test of competing models in the insurance industry," Quantitative Marketing and Economics (QME), Springer, vol. 5(2), pages 163-190, June.
    8. Sunil Gupta & Valarie Zeithaml, 2006. "Customer Metrics and Their Impact on Financial Performance," Marketing Science, INFORMS, vol. 25(6), pages 718-739, 11-12.
    9. Andrés Musalem & Yogesh V. Joshi, 2009. "—How Much Should You Invest in Each Customer Relationship? A Competitive Strategic Approach," Marketing Science, INFORMS, vol. 28(3), pages 555-565, 05-06.
    10. Marc Pomp & Victoria Shestalova & Luiz Rangel, 2005. "Switch on the competition; causes, consequences and policy implications of consumer switching costs," CPB Document 97, CPB Netherlands Bureau for Economic Policy Analysis.
    11. Polo, Yolanda & Sese, F. Javier & Verhoef, Peter C., 2011. "The Effect of Pricing and Advertising on Customer Retention in a Liberalizing Market," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 201-214.
    12. David A. Schweidel & Peter S. Fader & Eric T. Bradlow, 2008. "A Bivariate Timing Model of Customer Acquisition and Retention," Marketing Science, INFORMS, vol. 27(5), pages 829-843, 09-10.
    13. Romero, Jaime & van der Lans, Ralf & Wierenga, Berend, 2013. "A Partially Hidden Markov Model of Customer Dynamics for CLV Measurement," Journal of Interactive Marketing, Elsevier, vol. 27(3), pages 185-208.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christopher L. Newman & Melissa D. Cinelli & Douglas Vorhies & Judith Anne Garretson Folse, 2019. "Benefitting a few at the expense of many? Exclusive promotions and their impact on untargeted customers," Journal of the Academy of Marketing Science, Springer, vol. 47(1), pages 76-96, January.

    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. Johannes Habel & Sascha Alavi & Nicolas Heinitz, 2023. "A theory of predictive sales analytics adoption," AMS Review, Springer;Academy of Marketing Science, vol. 13(1), pages 34-54, June.
    2. Martín-Herrán, Guiomar & McQuitty, Shaun & Sigué, Simon Pierre, 2012. "Offensive versus defensive marketing: What is the optimal spending allocation?," International Journal of Research in Marketing, Elsevier, vol. 29(2), pages 210-219.
    3. Tarek Ben Rhouma & Georges Zaccour, 2018. "Optimal Marketing Strategies for the Acquisition and Retention of Service Subscriber," Management Science, INFORMS, vol. 64(6), pages 2609-2627, June.
    4. Polo, Yolanda & Sese, F. Javier & Verhoef, Peter C., 2011. "The Effect of Pricing and Advertising on Customer Retention in a Liberalizing Market," Journal of Interactive Marketing, Elsevier, vol. 25(4), pages 201-214.
    5. Ekinci, Yeliz & Ülengin, Füsun & Uray, Nimet & Ülengin, Burç, 2014. "Analysis of customer lifetime value and marketing expenditure decisions through a Markovian-based model," European Journal of Operational Research, Elsevier, vol. 237(1), pages 278-288.
    6. Valendin, Jan & Reutterer, Thomas & Platzer, Michael & Kalcher, Klaudius, 2022. "Customer base analysis with recurrent neural networks," International Journal of Research in Marketing, Elsevier, vol. 39(4), pages 988-1018.
    7. Sharan Jagpal & Feihong Xia, 2019. "Coordinating Marketing and Production with Asymmetric Costs: Theory and Estimation," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 6(1), pages 1-12, June.
    8. Xing Aijing & Nobuhiko Terui & P.K.Kannan, 2016. "How customer satisfaction affects loyalty: Insights from nonlinear hierarchical Bayes modeling of customer satisfaction index," TMARG Discussion Papers 124, Graduate School of Economics and Management, Tohoku University.
    9. Conor M. Henderson & Lena Steinhoff & Colleen M. Harmeling & Robert W. Palmatier, 2021. "Customer inertia marketing," Journal of the Academy of Marketing Science, Springer, vol. 49(2), pages 350-373, March.
    10. Sunčica Rogić & Ljiljana Kašćelan & Vladimir Kašćelan & Vladimir Đurišić, 2022. "Automatic customer targeting: a data mining solution to the problem of asymmetric profitability distribution," Information Technology and Management, Springer, vol. 23(4), pages 315-333, December.
    11. Yan Dong & Yuliang Yao & Tony Haitao Cui, 2011. "When Acquisition Spoils Retention: Direct Selling vs. Delegation Under CRM," Management Science, INFORMS, vol. 57(7), pages 1288-1299, July.
    12. Philipp Schmitt & Steffen Meyer & Bernd Skiera, 2010. "Überprüfung des Zusammenhangs zwischen Weiterempfehlungsbereitschaft und Kundenwert," Schmalenbach Journal of Business Research, Springer, vol. 62(1), pages 30-59, February.
    13. Glady, Nicolas & Lemmens, Aurélie & Croux, Christophe, 2015. "Unveiling the relationship between the transaction timing, spending and dropout behavior of customers," International Journal of Research in Marketing, Elsevier, vol. 32(1), pages 78-93.
    14. 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.
    15. Chiang, Lan-Lung (Luke) & Yang, Chin-Sheng, 2018. "Does country-of-origin brand personality generate retail customer lifetime value? A Big Data analytics approach," Technological Forecasting and Social Change, Elsevier, vol. 130(C), pages 177-187.
    16. Watson, George F. & Worm, Stefan & Palmatier, Robert W. & Ganesan, Shankar, 2015. "The Evolution of Marketing Channels: Trends and Research Directions," Journal of Retailing, Elsevier, vol. 91(4), pages 546-568.
    17. David A. Schweidel & Eric T. Bradlow & Peter S. Fader, 2011. "Portfolio Dynamics for Customers of a Multiservice Provider," Management Science, INFORMS, vol. 57(3), pages 471-486, March.
    18. 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.
    19. Chang, Shuhua & Zhang, Zhaowei & Wang, Xinyu & Dong, Yan, 2020. "Optimal acquisition and retention strategies in a duopoly model of competition," European Journal of Operational Research, Elsevier, vol. 282(2), pages 677-695.
    20. Philippe Aurier & Victor D. Mejía, 2021. "The differing impacts of brand-line breadth and depth on customers’ repurchasing behavior of frequently purchased packaged goods," Journal of the Academy of Marketing Science, Springer, vol. 49(6), pages 1244-1266, November.

    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:28:y:2014:i:3:p:210-224. 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.