Working Papers, Hanken School of Economics
Customer Energy in Relationships
() and Tore Strandvik
Abstract: All companies have a portfolio of customer relationships.
From a managerial standpoint the value of these customer relationships is a
key issue. The aim of the paper is to introduce a conceptual framework for
customers’ energy towards a service provider. Customer energy is defined as
the cognitive, affective and behavioural effort a customer puts into the
purchase of an offering. It is based on two dimensions: life theme
involvement and relationship commitment. Data from a survey study of 425
customers of an online gambling site was combined with data about their
individual purchases and activity. Analysis showed that involvement and
commitment influence both customer behaviour and attitudes. Customer
involvement was found to be strongly related to overall spending within a
consumption area, whereas relationship commitment is a better predictor of
the amount of money spent at a particular company. Dividing the customers
into four different involvement / commitment segments revealed differences
in churn rates, word-of-mouth, brand attitude, switching propensity and the
use of the service for socializing. The framework provides a tool for
customer management by revealing differences in fundamental drivers of
customer behaviour resulting in completely new customer portfolios.
Knowledge of customer energy allows companies to manage their communication
and offering development better and provides insight into the risk of
losing a customer.
Keywords: involvement; commitment; customer energy; segmentation; customer portfolio; customer dominant logic; (follow links to similar papers)
26 pages, September 6, 2010
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