Creating Enduring Customer Value

Abstract

One of the most important tasks in marketing is to create and communicate value to customers to drive their satisfaction, loyalty, and profitability. In this study, the authors assume that customer value is a dual concept. First, in order to be successful, firms (and the marketing function) have to create perceived value for customers. Toward that end, marketers have to measure customer perceived value and have to provide customer perceptions of value through marketing-mix elements. Second, customers in return give value through multiple forms of engagement (customer lifetime value, in the widest sense) for the organization. Therefore, marketers need to measure and manage this value of the customer(s) to the firm and have to incorporate this aspect into real-time marketing decisions. The authors integrate and synthesize existing findings, show the best practices of implementation, and highlight future research avenues.

Good, better, engaged? The effect of company-initiated customer engagement behavior on shareholder value

“…Yet, given sufficient evidence that strategies aiming to influence customer loyalty and customer lifetime value increase performance (e.g., Kumar and Shah 2009;Kumar and Reinartz 2016), it may very well be that these positive performance effects are due to increased transactional customer engagement behavior, rather than non-transactional customer engagement behavior. This extended conceptualization of customer engagement does not allow for disentangling the performance consequences of the measures stimulating transactions from those stimulating non-transactional customer behavior.…”

“…This more narrow definition of customer engagement allows us to focus on the value-related consequences of stimulating non-transactional behavior, which is clearly acknowledged as a very important aspect of customer engagement (see Alexander and Jaakkola 2016). We thus explicitly do not consider value creation through transactions, which is well covered in the customer relationship management literature (e.g., Kumar and Reinartz 2016;Verhoef and Lemon 2013). Furthermore, we restrict ourselves to concrete customer behaviors.…”

Zara vs. Uniqlo: Leadership strategies in the competitive textile and apparel industry

“…Zara and Uniqlo have pursued global strategies that are informed by the Web and social media as well (Gamboa & Gonçalves, ). Tapping into the trend of offering customers both value and a “journey” that encourages interaction and identification with a product (Kumar & Reinartz, ; Lemon & Verhoef, ), Zara and Uniqlo use social media and Web‐based models to target their diverse markets and niche segments.…”

The influence of customer value on word of mouth: a study of a financial services company in Brazil

“…Relationship marketing encompasses marketing activities to establish, develop, and maintain successful exchange relationships with customers (Palmatier, Dant, Grewal, & Evans, 2006). A solid and longterm relationship with customers improves loyalty and enhances retention (Kumar & Reinartz, 2016). Moreover, firms create a competitive advantage by leveraging their marketing activities to convert customers into relationship marketingbased assets (Chang & Olumide, 2016).…”