Recent years have witnessed the rise of new media channels such as Facebook, YouTube, Google, and Twitter, which enable customers to take a more active role as market players and reach (and be reached by) almost everyone anywhere and anytime. These new media threaten long established business models and corporate strategies, but also provide ample opportunities for growth through new adaptive strategies. This paper introduces a new ''pinball'' framework of new media's impact on relationships with customers and identifies key new media phenomena which companies should take into account when managing their relationships with customers in the new media universe. For each phenomenon, we identify challenges for researchers and managers which relate to (a) the understanding of consumer behavior, (b) the use of new media to successfully manage customer interactions, and (c) the effective measurement of customers' activities and outcomes.

Chris tian FriegeDou ble day Di rect, Inc.Ser vice mar kets are in creas ingly com peti tive while at the same time cus tomer loy alty de creases. To suc ceed in these mar kets, ser vice pro vid ers have to ad dress not only prospects and ex ist ing cus tom ers but also lost cus tom ers as a dis tinc t tar get group for their cus tomer man age ment. This ar ti cle de vel ops a con cep tual ba sis for "re gain man agement" aimed at win ning back cus tom ers who ei ther give no tice to ter mi nate the busi ness re la tion ship or whose rela tion ship has al ready ended. Re gain man age ment of fers ser vice pro vid ers prof it able ac qui si tion by adopt ing a specific man age ment pro cess con sist ing of re gain analy sis, re gain ac tions, and re gain con trol ling. Es sen tial for this pro cess is a cus tomer da ta base that al lows seg men ta tion of lost cus tom ers and a segment-specific varia tion of regain dia logues and re gain of fers.Tra di tion ally, mar ket ing in gen eral and ser vices market ing spe cifi cally fo cused on ac quir ing new cus tom ers. Only dur ing the past few years has cus tomer re ten tion been rec og nized as a criti cal stra te gic task for ser vice manag ers (Rust, Za ho rik, and Kein ing ham 1996, pp. 312-15, 332-35). This is par ticu larly the case in ma ture mar kets with lit tle or no growth. Here, new cus tom ers can only be ac quired at high cost and any loss of cus tom ers both weakens one's own busi ness and strength ens a com peti tor.Mar ket ing re search has re vealed re peat edly that in vestments in cus tomer re ten tion are prof it able, es pe cially in com pari son to ex penses for the ac qui si tion of new cus tomers or cost-cutting pro grams (For nell and Werner felt 1987;Heskett et al. 1994; Reichheld and Sas ser 1990; Reichheld and Teal 1996). The rea sons for the prof it abil ity of customer re ten tion strate gies are evi dent: To main tain a sta ble level of busi ness, for each cus tomer lost, a new cus tomer has to be re cruited, en tail ing costs for ad ver tis ing and promo tion ac tivi ties. Fur ther more, a cus tomer's prof it abil ity in creases with the du ra tion of the busi ness re la tion ship, as in gen eral the cus tomer's pur chase in ten sity grows, the oper at ing cost de clines, and posi tive word of mouth leads to ad di tional sales (Grön roos 1990, p. 137; Page, Pitt, and Ber thon 1996, p. 822; Reichheld and Sas ser 1990; Zeithaml, Berry, and Parasu ra man 1996, p. 32).Higher cus tomer re ten tion (and that means a re duc tion of cus tomer de fec tion) has a posi tive im pact on the com pany's profit. This has been the con sis tent con clu sion of several em piri cal stud ies. Hal low ell's (1996) re search among 12,000 bank cli ents re veals that "cus tomer loy alty is related to prof it abil ity at the bank" (p. 36). Reichheld (1993) names vari ous ex am ples of cal cu la tions con ducted by indi vid ual com pa nies. Ac cord ing to his data, the credit card com pany MBNA, for ex am ple, was able to in crease prof its by 60% within 5...

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