Douglas Bowman’s research while affiliated with Emory University and other places

A key challenge facing business marketers surrounds developing a deeper understanding of customer needs. We conceptualize that challenge as having three dimensions: calculating, creating, and claiming value. We discuss key problems, new developments and research challenges in each of these three domains and note the desirability for a deeper collaboration between academics and practitioners to address the research challenges.

Conceptually, customer relationship management (CRM) has been widely embraced by businesses. In practice, however, examples of success contrast with anecdotes where the diffusion of CRM into organizations continues to be a slow process and/or where CRM implementation outcomes have fallen short of expectations. Successful implementation depends on a number of factors such as fit between of a firm’s CRM strategy and programs and its broader marketing strategy, and intraorganizational and interorganizational cooperation and coordination among entities involved in implementation. Building on the results of a survey of the CRM-implementation-related experiences of 101 U.S.-based firms, in this article the authors identify factors associated with successful CRM implementation and advance directions for future research.

As firms search for ways to achieve profitable growth, it is natural for them to consider seeking more business with the customers they presently serve. Customer management pundits often propose that it is easier and less costly for firms to gain incremental sales from existing customers than to prospect for, and develop, customers with whom they currently do not do business. Yet, as Anderson and Narus (2003) argue, most firms struggle to devise or implement anything but the most sales-oriented growth strategies and tactics. A particular challenge is how to link resource investments, especially those deployed at the customer or segment level (versus market level), with customer-level sales and profitability (Libai, Narayandas, &Humby, 2002). Profit chain-of-effects or cascading frameworks represent an intuitively appealing way to achieve this objective. They link resource inputs under the control of managers to customer-level sales and profitability. Consider, for example, Heskett, Jones, Loveman, Sasser, and Schlesinger’s (1994) Service-Profit Chain (SPC). Working backwards, customer profitability is largely based on customer loyalty. Supporting arguments that have been advanced include loyal customers being less costly to serve, less price-sensitive and hence willing to pay higher prices, and more likely to be advocates who generate sales via positive word-of-mouth, to name a few. Further, the widespread adoption of loyalty programs can only be assumed to be due in part to their (assumed) positive impact on profits. Customer loyalty, in turn, is driven by customer satisfaction. This relationship has similar intuitive appeal; if customers are satisfied with a vendor’s products and services, then it is only natural that loyalty should follow. Anecdotal support abounds, such as Xerox’s finding that top-box customers in a satisfaction survey are six times more likely to repurchase than those responding with four out of five (Heskett, et al., 1994).

Chain-link frameworks such as the service-profit chain (SPC) are much discussed as a means to link customer profits to operational resources under the influence of vendor managers, though empirical testing to date has been limited primarily to consumer services settings. In this article, the authors adapt the SPC framework to accommodate characteristics of business markets, specifically the complex decision-making unit, strategic supplier selection, and resource allocation at the individual customer level. They also extend the SPC framework to allow for a richer description of the complex linkages between vendor effort and account profitability, namely, nonlinear linkages and differential responsiveness occasioned by customer-specific factors such as competitive context. Controlling for such factors illuminates, to some degree, why similar levels of customer management effort and/or performance can yield quite different customer profitability outcomes. The authors present an application that demonstrates how adaptation and extension of the SPC to business markets can provide vendors with (1) insights into the process that culminates in individual customer profitability and (2) useful guidelines for adapting their customer management efforts at the individual account level with an aim to improve account profitability. The results show the importance of accounting for decreasing returns to customer management effort at a given account, and they reinforce the notion of customer delight.

A comparison of samples of business-to-business firms based in major cities in China, Hong Kong, India, Japan, Thailand, and Vietnam finds significant differences across countries on several organizational dimensions, including innovativeness, market orientation, and organizational climate and culture. The work is framed in a modified competing values model that is based on theoretical work from the West, but the developmental work for empirical application was carried out in Japan. In general, the differences observed in Asia are consistent with the countries' historical and cultural differences. Notably, however, the impact of the organizational dimensions on firm performance is statistically identical across the countries. Tests of hypotheses related to performance of firms in the Asian samples produced results that are qualitatively similar to a previous study of five industrial countries, but the importance weights of the individual factors are different. In particular, the significant effect of market orientation on performance is greater in Asia, whereas the similarly significant impact of innovativeness on performance is greater in the industrial countries.

The authors examine factors that affect product-usage compliance, or the act of using a product as it is intended to be used. They develop a conceptual model of compliant behavior as a function of four main constructs: (1) salience/mindfulness, (2) the consumer's costs and benefits of compliant behavior, (3) advertising and distribution cues to action, and (4) the perceived threats associated with noncompliant behavior. They test the model using a regression mixture model of compliant behavior calibrated on unique panel data from four categories of pharmaceutical drugs that are used to treat chronic (i.e., lifelong) ailments. The findings include insights into the dynamics of product compliance: The data support the proposed four-stage evolution of compliant behavior between consecutive service provider (e.g., doctor) interventions. For marketers, the authors find substantial heterogeneity across consumers for the effects of cues from advertising and distribution. For example, in some segments, advertising has a positive impact on compliance (directly and/or by heightening responsiveness to product-efficacy evaluations), whereas in other segments, its effect is negative. Thus, the authors shed new light on the effects of advertising, which has both strong advocates and opponents in the pharmaceutical industry.

There is increasing interest in understanding and characterizing the behavior of consumers across multiple categories. In this research we examine insights from segmentation derived from considering consumer behavior in multiple categories jointly. To derive the segmentation we develop a logit-mixture model of brand choice that considers the behavior of customers in multiple categories jointly. When a brand competes in multiple categories we generalize the effect of purchase feedback to include the effect of purchases of the brand in multiple categories. An application using data on purchases made by a panel of consumers in three baby products categories, two of which contain some common brands, is presented. We discuss the insights from deriving segmentation in which multiple categories are considered jointly and the implications of our results for a manager whose brand competes in more than one category. Our results should also be of interest to a manager of a brand that is marketed only in a single category yet competes against multiple-category competitors.

The authors examine behavioral outcomes following a customer-initiated contact (CIC) with a manufacturer and develop a framework to explain the impact of vendor performance during a CIC on a customer's share of category requirements with a focal brand and word-of-mouth incidence following contact. The authors propose customer characteristics and context-specific factors that may relate to differences in the key characteristics of the underlying source model of share of category requirements and word of mouth. The authors then assess the overall importance of the explanatory variables in the source model and simultaneously test for systematic differences related to CIC-specific factors using survey data from more than 1700 CICs that involve more than 60 brands. A key assumption in much prior research that has examined customer-firm interactions is that CIC-specific factors, if they are included at all, create an automatic regularity that must be controlled for. The authors propose and find an additional effect. The responsiveness to factors under a firm's control varies across CICs, and therefore firms that adapt their processing have an advantage. Rather than provide a uniform response to all CICs, the authors' results offer managers several guidelines on how to customize their responses to the various CIC types and how to improve the efficiency and effectiveness of their firms' CIC management efforts.

The authors examine how brand preferences and response to marketing activity evolve for consumers new to a market. They develop a theoretical framework that begins with a consumer's first-ever purchase in a product category and describes subsequent purchases as components of sequential purchasing stages. The theory is based on the notion that choices made by consumers new to a market are driven by two competing forces: consumers' desire to collect information about alternatives and their aversion to trying risky ones. These forces give rise to three stages of purchasing: an information collection stage that focuses initially on low-risk, big brand names; a stage in which information collection continues but is extended to lesser-known brands; and a stage of information consolidation leading to preference for the brands that provide the greatest utility. The authors use a logit-mixture model with time-varying parameters to capture the choice dynamics of different consumer segments. The results show the importance of accounting for product experience and learning when studying the dynamic choice processes of consumers new to a market. Insights from this study can help marketers tailor their marketing activities as consumers gain purchasing experience.