Customer-Firm Interactions

cup-2884023_1920[We’re pleased to welcome authors Jesús Cambra-Fierro of the University Pablo of Olavide, Iguácel Melero-Polo of the University of Zaragoza,  F. Javier Sese of the University of Zaragoza, and Jenny van Doorn of the University of Groningen. Wakefield. They recently published an article in the Journal of Service Research entitled “Customer-Firm Interactions and the Path to Profitability: A Chain-of-Effects Model,” which is currently free to read for a limited time. Below, Dr. Melero-Polo reflects on the theories and implications of this research:]

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This study investigates a chain of effects to understand the causal path from customer informational inquiries (CIIs) and firm-initiated contacts (FICs) to customer profitability. Customer–firm interactions are the starting point of the relationship between these parties, and contribute to determining the relationship’s future (Dwyer, Schurr, and Oh 1987; Anderson and Weitz 1992). These interactions can be initiated either by firms or by customers. Although companies have traditionally taken the initiative to contact customers (FICs), nowadays, the growing importance of the customer in value-creation processes has changed the rules of the game. Thus, there has been a significant increase in the number of CIIs that companies have to properly manage. However, despite the importance of this topic, more research was needed to clarify the effectiveness of FICs and CIIs (Hennig-Thurau, Gwinner, and Gremler 2002; Hogan et al. 2002; Palmatier et al. 2006).

Drawing on social exchange theory, our framework identifies a set of attitudinal (perceived relationship investment and relationship quality), behavioral (customer cross-buy and service usage), and financial (customer profitability) consequences of CIIs and FICs, and also explores the extent to which customer-perceived financial risk and customer involvement shape attitudinal reactions to CIIs and FICs. We follow Bolton, Lemon, and Verhoef (2004), who propose a causal sequence of the effects of marketing instruments (FICs): (1) FICs influence relationship perceptions, (2) which influence customer behaviors, (3) which, in turn, affect financial outcomes. However, we go a step further and empirically analyze the chain of effects following FICs and CIIs. Furthermore, we include two contingency variables that can help in understanding how these customer–firm interactions (FICs and CIIs) contribute to building stronger relationships.

Through our analysis of this chain of effects, we are able to propose specific guidelines for managers in order to improve customer–firm relationships and increase the value that each customer can provide to the firm.
Our contingency framework reveals that the impact of FICs and CIIs may vary between different customers depending on their levels of perceived risk and customer involvement. Specifically, FICs and CIIs are a particularly valuable tool for strengthening the relationship with customers with a low level of involvement, but high perception of financial services risk. For highly involved customers, FICs and CIIs are not very effective; CIIs can even backfire if the customer also perceives the risk to be low. Our results highlight the importance of market segmentation for marketers to more effectively manage when and to whom they should target marketing activities (FICs) and steer CIIs.

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Interaction photo attributed to rawpixel. (CC)

How People Think About Prices

shopping-1724299_1280 (1)[We’re pleased to welcome authors Lane T. Wakefield of Mercer University and Kirk L. Wakefield of Baylor University. They recently published an article in the Journal of Service Research entitled “An Examination of Construal Effects on Price Perceptions in the Advance Selling of Experience Services,” which is currently free to read for a limited time. Below, they reflect on the inspiration for conducting this research:]

02JSR13_Covers.inddWhat motivated you to pursue this research?

As a huge sports fan and one that enjoys concerts and vacations as much as the next person, I find this research interesting as it suggests how people think about ticket prices.

In what ways is your research innovative, and how do you think it will impact the field?
This research can impact the field by offering practitioners guidance in identifying who, when and where buyers of experiences are likely to be more or less price sensitive and perceive more or less value. This information helps managers to deliver the right offers or, at least, frame their current offerings more effectively.

Were there any surprising findings?

Our most surprising finding was that buyers tend to think about what other buyers are doing in the market. We found that the majority (65%) of buyers consider what others may perceive as a good price. When it comes to fun experiences, buyers assume that others see those experiences as having high value even if they do not share that feeling personally. Sellers may do well to frame their offerings in terms of how typical fans may see them rather than asking the buyer for their own thoughts. Price perceptions are affected by who you bring to mind (self vs others).

What did not make it into your published manuscript that you would like to share with us?

We identified a segment of consumers who are more price sensitive when they perceive high value. Typically, this relationship is seen as the opposite. That is, those who perceive high value may be less price sensitive (i.e. can you really put a price tag on the Cowboys vs Redskins on Thanksgiving?). However, we believe that there are some who enjoy attending games, concerts and the like so much that they become price sensitive in order to be able to afford to have more experiences within their limited budgets. Hopefully you’ll see more about this research soon!

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Price tag photo attributed to gdakaska. (CC)

Psychological Capital for Leader Development

[We’re pleased to welcome authors Thiraput Pitichat of Claremont Graduate University. Pitichat recently published an article in Journal of Leadership & Organizational Studies entitled “Psychological Capital for Leader Development,” which is currently free to read for a limited time. Below, Pitichat speaks on the objectives of this research:]

JLOS_72ppiRGB_powerpointWhat are the mechanisms behind effective leader development processes? Why do some individuals have a tendency to develop as leaders more than the others? This research suggests that organizations should focus on promoting leaders’ valuable resources or capital – Leader development psychological capital (LD PsyCap), which consists of leader development hope, optimism, resilience, and self-efficacy. Two main objectives of this research are:

1.) to validate LD PsyCap construct; 2.) to test our hypotheses on individual and organizational level factors that predict LD PsyCap as well as leader development behaviors as an outcome of LD PsyCap.

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Capturing Relative Importance of Customer Satisfaction Drivers Using Bayesian Dominance Hierarchy

[We’re pleased to welcome authors Philippe Duverger and Xiaoyin Wang of Towson University. Duverger and Wang recently published an article in Cornell Hospitality Quarterly entitled “Capturing Relative Importance of Customer Satisfaction Drivers using Bayesian Dominance Hierarchy,” which is currently free to read for a limited time. Below, they reflect on the inspiration for conducting this research:]

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What motivated you to pursue this research?

We observed that most research on the drivers of customer satisfaction (CS) used large samples, often aggregated from several month and/or several properties. Although this is a fine method to look at CS trends it is not practical at the property level for immediate action. The current methods require large samples in order to achieve sufficient power and find significant estimates in models. Unfortunately, most hotel property monthly survey yield samples of less than 100 that will make driver analyses problematic and more likely most drivers will have non-significant estimates.

We asked ourselves if there would not be a method that could circumvent the problem of property managers that want and need to address CS drivers on a monthly basis, if not on a daily basis.

What has been the most challenging aspect of conducting your research? Were there any surprising findings?

We used a Bayesian statistical framework, borrowing from several literature areas to construct a model. Bayesian statistical analysis is still a fairly new method in practice, often not well understood, and can be computationally heavy. Therefore we first needed to explain the advantages of the method in a way that was pragmatic enough because our goal in this paper was to appeal to the hospitality manager.

Bayesian statistics work from the belief that the unknown parameter is a random variable and is associated with a probability distribution (prior distribution). The information in the sample data is used to adjust the prior perception of the unknown parameter and results in the final estimation of the parameter (posterior distribution). Therefore, even if the sample is small, significance can be determined.

Maybe more pragmatically, Bayesian analysis is “often a more direct way to tackle questions we usually want to know, such as: is the hypothesis likely to be true?” Bayesian analysis does not use double negatives, such as we often encounter, e.g., “we failed to reject the null hypothesis that there is no difference.” Bayesian analysis reports are straight forward: “given these data, it is likely that the difference is X% probable” (Chapman and McDonnell Fei 2015, p. 150).

There are many other advantages that we discuss in the paper.

In what ways is your research innovative, and how do you think it will impact the field?

We believe that our Bayesian model, for which we share the code at http://tinyurl.com/kdqjf4u, could be used by hospitality properties or hospitality corporate departments, to enhance monthly reporting along with other marketing metrics, and shared via dashboards.

 

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Webinar Highlights: Presenting Data Effectively

[The following post is re-blogged from Social Science Space. Click here to view the original article.]


Crystal clear graphs, slides, and reports are valuable – they save an audience’s mental energies, keep a reader engaged, and make you look smart. This webinar held on June 6, 2017, covers the science behind presenting data effectively and will leave viewers with direct, pointed changes that can be immediately administered to significantly increase impact. Guest Stephanie Evergreen also addresses principles of data visualization, report, and slideshow design that support legibility, comprehension, and stick our information in our audience’s brains.

Evergreen’s presentation was followed by an audience question-and-answer session, which is included in the recording. Not all the questions were answered at the time, and Evergreen answers some additional session questions below.

Evergreen is an internationally recognized speaker, designer, and researcher best known for bringing a research-based approach to better communicate through more effective graphs, slides, and reports. She holds a PhD from Western Michigan University in interdisciplinary evaluation, which included a dissertation on the extent of graphic design use in written research reporting. Evergreen has trained researchers worldwide through keynote presentations and workshops, for clients including Time, Verizon, Head Start, American Institutes for Research, Rockefeller Foundation, Brookings Institute, and the United Nations. She is the 2015 recipient of the American Evaluation Association’s Guttentag award, given for notable accomplishments early in a career.

She is co-editor and co-author of two issues of New Directions for Evaluation on data visualization. She writes a popular blog on data presentation at StephanieEvergreen.com. Her books SAGE Publishing books Presenting Data Effectively and Effective Data Visualization both reached No. 1 on Amazon bestseller lists. A second edition of Presenting Data Effectively was published in May.

  1. When is it best to place the data information (e.g. 20 percent) on a bar or lollipop vs. using a scale on the side or bottom of a chart?

If people will want to know the exact value, add the data label. If the overall pattern of the data and estimated values are sufficient, use a scale. But don’t use both – that’s redundant.

  1. How do your clients and colleagues respond to the ‘flipped report,’ in which research findings and conclusions are presented before the discussion, literature, methodology, and background sections?

With a “duh” as in “Why haven’t I thought of that before”? Generally, clients appreciate how a flipped report values their time. On occasion, you and I will find audiences who really bristle at the idea, usually people steeped in the academic culture, so check first if a flipped report structure would be okay.

  1. Any tips for the converted about changing resistant organizational culture to data visualization? “You need to use our template!”

Culture change is slow, so the first tip is to be patient. After that, try remaking one of your own old (bad) slides or graphs to show what an overall would look like. See if you can get a friendly client or customer you know to give you feedback on it. Then report on the redesign and the feedback to others in your organization. Try getting someone from senior management on board. Leave a copy of my book in their mailbox or in the break room. And hang in there.

  1. How do we report small numbers? Without percentages?

I would report small numbers as raw numbers, not percentages. Try an icon array for a visual.

  1. Where is the best place to get report templates?

In your imagination! Any report template is going to look like a report template, not like something that fits your own work. Look around for inspiration, for sure, like on my Pinterest boards, but create your own style that fits you and your work.

  1. What program do you use to create dashboards or infographics? We’ve used Piktocharts…. are there others?

I work within the Microsoft Office suite. I make dashboards in Excel and infographics in PowerPoint. This way I have total control over the design and everyone on my team can make edits. A quick Google search of either dashboard or infographic programs will give you hundreds of choices you could work with. If you want something from that list, look for maximum flexibility, low learning curve, and reasonable expense.

  1. Each chart can have multiple findings; are we skewing the results when we highlight certain findings over others using color and data?

“Skewing” sounds like we are manipulating, but that’s not the case. Using color to highlight a certain part of the graph still leaves the rest of the graph completely intact and able to be seen. Adding color does, however, reflect an interpretation we have made of the data. But that isn’t “skewing” – it’s telling people our point and that’s why they are listening to us in the first place.

  1. Can you please explain the difference between your two books? Thanks!

Sure! Effective Data Visualization walks you through how to choose the right chart type and then how to make it in Excel. Presenting Data Effectively talks about formatting graphs well with consideration of text and color and broadens that discussion to address dashboards, slides, handouts, and reports.

  1. One challenge I face is presenting nuanced findings in an accessible way. For example, when there are limitations to the data or subgroups that need to be acknowledged or findings need to be interpreted with caution. As a researcher, it worries me that the client might put tentative findings “out there”, misrepresenting them (to a degree).

This makes your title and subtitle ever more important. Be very clear in your wording that the findings are limited. You can also add things like confidence intervals to your graph if you are confident that the reader will know how to interpret them. If it is still going to be a concern, don’t make a graph of the data. People are drawn to graphs because we look at pictures so don’t put the data in a picture if you are worried people won’t read the nuanced narrative.

Understanding Customer Barriers and Barrier-Attenuating Practices in Access-Based Services

[We’re pleased to welcome authors Simon Hazée, Cécile Delcourt, and Yves Van Vaerenbergh who recently published an article in the Journal of Service Research entitled “Burdens of Access: Understanding Customer Barriers and Barrier-Attenuating Practices in Access-Based Services.” Below, the authors share more insight on their research in the service industry:]

What motivated you to pursue this research? JSR_16.2_72ppiRGB_powerpoint.jpgWe are witnessing a global rise of what’s been called ‘the access economy’. This growth is yet mainly driven by an increasing supply, with lots of companies—including manufacturers like BMW or Daimler AG—offering services that grant customers limited access to goods. Although these services offer several potential advantages, convincing customers to use them remains challenging. Service innovation failures represent potential losses of revenues that can even endanger firms’ competitiveness; indicating the pressing need to understand the barriers that keep customers from participating in the access economy.

Were there any surprising findings? Customers face several important barriers for why they don’t participate in the access economy, and these barriers do not always have rational grounds. For instance, one striking observation is that customers are afraid of contamination. After all, when accessing goods, you know for sure that someone else—whom you do not know—has touched the product; this may create disgust and avoidance responses. Another surprising finding is that customers believe they must engage in a bunch of practices to attenuate the barriers themselves. For example, customers must be ready to alter or postpone their needs to counter the fact that goods might not be available when needed, an important barrier perceived by customers.
Interestingly, although engaging in such practices helps attenuating barriers, customers also consider them as burdensome.

In what ways is your research innovative, and how do you think it will impact the field?Our findings suggest that customers reject service innovations not only in response to numerous perceived barriers associated with the innovation but also out of consideration of the practices in which they must engage to attenuate those barriers. Prior research shows customers typically adopt and use access-based services to avoid the burdens of ownership. We show that they reject these services due to the burdens of access, which include the barriers to access and the barrier-attenuating practices. Understanding both the barriers and the practices in which customers engage is critical for theory and practice; it can reveal new ways to see, examine, and manage service innovations. In sum, the success of access initiatives is not necessarily for those service providers that show the benefits of using the service, but might be for those who are best at overcoming the barriers as well as facilitating and limiting the practices in which customers engage.

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The Effect of Social Networking Sites’ Activities on Customers’ Well-Being

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[We’re pleased to welcome Seonjeong Lee, Assistant Professor at Kent State University in Hospitality Management. Lee recently published an article in Journal of Hospitality & Tourism Research entitled “The Effect of Social Networking Sites’ Activities on Customers’ Well-Being.” From Lee:]

  • What inspired you to be interested in this topic?

    With customers’ increased interests in their well-being, many hotels have opened their eyes to the concept of “well-being” to promote their service offerings, to distinguish their brands from competitors, and to attract more customers. For instance, Westin Hotels & Resorts launched a well-being movement to promote their brands through meeting customers’ well-being needs. Scholars have also responded to increased interests in well-being, by investigating employees’ and customers’ perspectives; however, it was still puzzling what made customers fulfill their psychological needs that fostered their well-being perceptions when customers engaged with SNSs to share their hotel experiences. Thus, this study explored the effectiveness of the well-being marketing to investigate SNSs’ activities that influenced customers’ psychological needs and impact of a sense of well-being on customers’ brand usage intent in the context of the hotel industry.

  • Were there findings that were surprising to you? 

    Results revealed that not all customers’ SNSs’ activities had positive effects on their autonomy and relatedness needs. When customers engaged with SNSs’ activities for self-centered motivations, such as self-enhancement and venting negative feelings, they fulfilled their autonomy and relatedness needs. However, customers did not positively fulfill their psychological needs when they posted their hotel experiences with other-centered motivations, such as concern for others. Even though one of the main motivations for customers to engage with SNSs’ activities was to add values to others (Hennig-Thurau et al., 2004), customers might not be able to fulfill their psychological needs when they post comments of concern for others.

  • How do you see this study influencing future research and/or practice?

Based on prior well-being marketing research and self-determination theory, this study examined how SNSs’ activities influenced customers’ sense of well-being when customers shared their hotel experiences and how hotel brands could benefit from customers’ well-being perceptions in SNSs. Results suggest hotel marketers need to promote their well-being marketing in SNSs. As customers positively fulfill their psychological needs through self-centered SNSs’ activities, hotels need to provide a place where customers share their experience to resolve any dissatisfied incidents and promote themselves to enhance their self-concept. In addition, hotels need to develop proper response strategies to customers’ negative comments. Even though venting negative feelings positively fulfilled customers’ psychological needs, negative comments might negatively influence prospective customers. Hotels need to adopt proper response strategies to develop a positive relationship with customers.

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