How to grow a brand: Retain or acquire customers?

Riebe, Erica; Wright, Malcolm; Stern, Philip; Sharp, Byron

doi:10.1016/j.jbusres.2013.08.005

Cited by 41 publications

(40 citation statements)

References 23 publications

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“…However, the claimed advantages of customer retention have been questioned (e.g., Dowling and Uncles 1997, Reinartz and Kumar 2000, East, Hammond and Gendall 2006. Furthermore, research indicates that brands grow primarily by securing new customers rather than getting existing customers to buy more (Ehrenberg, Uncles and Goodhardt 2004, Sharp 2010, Riebe, Wright, Stern and Sharp 2014, Romaniuk, Dawes and Nenycz-Thiel 2014, Romaniuk and Sharp 2016. On the basis of this evidence, these authors have argued that brand growth is best achieved by methods that focus on raising customer acquisition.…”

Section: How Does Wom Contribute To Customer Acquisition and Retention?mentioning

confidence: 99%

“…Sharp cites Baldinger, Blair, and Echambadi (2002) and draws on Ehrenberg's (1988) extensive research on consumer behaviour which shows much more variability in penetration than purchase frequency, favouring strategies designed to increase penetration. Recent work has also emphasized the way growth occurs through customer acquisition (Riebe, Wright, Stern andSharp 2014, Romaniuk, Dawes andNenycz-Thiel 2014). If this approach is correct, we need to know how different methods contribute to customer acquisition.…”

Section: The Influence On Retention and Acquisitionmentioning

confidence: 99%

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The Impact of Word of Mouth on Intention to Purchase Currently Used and other Brands

East

Romaniuk

Chawdhary³

et al. 2017

International Journal of Market Research

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This paper measures how the impact of positive and negative word of mouth (PWOM, NWOM) is related to the receiver's intention to purchase brands, using shift in the intention to purchase as the measure of impact. It distinguishes between currently used and other brands, and finds that PWOM has more impact, and NWOM less, when these forms of advice are on the current brand. The PWOM effect persists among those who are disinclined to rebuy their current brand, so it is not based on preference. Similarly, the NWOM effect is not enhanced when respondents are disinclined to repurchase their current brand. To explain this phenomenon, we suggest that the current brand is better understood, making it easier for customers to accept PWOM and reject NWOM on it, irrespective of preference. This work, by showing that the response to WOM is relatively independent of preference, also indicates that bias based on preference may be a limited hazard in survey responses about WOM. When account is taken of the relative frequency of WOM on current and other brands, PWOM has twice as much effect on customer acquisition as customer retention, while NWOM has more than four times as much effect in deterring the acquisition of new buyers as it has on deterring customer retention. This evidence contributes to our understanding of how WOM acts to both retain and acquire customers.

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Section: How Does Wom Contribute To Customer Acquisition and Retention?mentioning

confidence: 99%

Section: The Influence On Retention and Acquisitionmentioning

confidence: 99%

The Impact of Word of Mouth on Intention to Purchase Currently Used and other Brands

East

Romaniuk

Chawdhary³

et al. 2017

International Journal of Market Research

View full text Add to dashboard Cite

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“…Riebe et al . () concluded brand growth came more from unusually high rates of customer acquisition than unusually low rates of defection. While their study was not in the context of packaged goods (the focus of this paper), their findings infer that penetration should change more than loyalty rates as brands grow.…”

Section: Background and Literature Reviewmentioning

confidence: 99%

Brand growth in packaged goods markets: Ten cases with common patterns

Dawes

2016

J of Consumer Behaviour

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The study examines 10 consumer goods brands that grew market share year on year, to identify if there are commonalities in the way that key brand performance metrics change during growth. The study uses consumer panel data from the UK and USA. Ten brands in a range of categories are examined. Brand metrics of penetration, repeat‐purchase loyalty, cross‐purchasing by other brand's buyers, the distribution of purchase frequency, and the brand's market share within buyer subgroups are analyzed. The principal findings are as follows: (1) as these brands grew, brand penetration increased far more than repeat‐purchase loyalty on average; (2) the most apparent change in the buyer base was the big increase in light or infrequent buyers; (3) they induced more cross‐purchasing from most or all other competitor brands' buyers; and (4) they grew their market share in all buyer demographic groups. Implications are that brand growth strategies should be geared towards enlarging the size of the customer base, with less emphasis on boosting loyalty. The results also suggest that specifically targeting certain sorts of buyers may be counterproductive. These findings challenge traditional assumptions in relation to brand growth and success. Copyright © 2016 John Wiley & Sons, Ltd.

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“…Furthermore, as indicated by Schweidel et al (2008), customer retention in subscription markets can often be explained by the heterogeneity of a customer database, as much as organic attrition. Riebe et al (2014) reinforced the idea that there will always be a level of attrition, and marketers need to recognize the importance of continual acquisition required in order for a brand to grow. Lifetime value has been offered as the key metric to wine club members, recognizing that it is not the conversion rate from visitor to wine club member, nor is it the first sale, but in fact the second and subsequent sales (McMillan, 2014;Castéran et al, 2017).…”

Section: Discussionmentioning

confidence: 99%

“…Wineries in the USA have attempted to combat the regular substitution of wine brands in repertoire markets by applying a customer retention tool that is more consistent with subscription services, such as telecommunications and sports club members (McDonald et al, 2014;Wong, 2011). Successful management of customers in a subscription model can lead to lower churn rates, but still requires continuous acquisition in order for the business to grow (Castéran et al, 2017;Hassouna et al, 2015;Riebe et al, 2014). The aim for wineries is to thus identify likely indicators of attrition, like subscriber heterogeneity and/or seasonality, and act assiduously to reduce their effect (Schweidel et al, 2008).…”

Section: Attrition and Retentionmentioning

confidence: 99%

Defecting wine club members: an exploratory study

Newton

Nowak

Kelkar

2018

IJWBR

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Purpose -The purpose of this study is to investigate the range of explanations for why wine club members defect and move on.Design/methodology/approach -This quantitative research study uses data from US wine consumers, gathered through an online survey of 399 former wine club members who had quit their membership in the recent past. Consistent with literature on customer churn rates in subscription markets, data are analyzed using descriptive statistics, factor analysis, hierarchical multiple regression and analysis of variance.Findings -The results reported by respondents indicate that higher levels of perceived product quality, fair value in pricing, variety seeking and commitment to customer service at the beginning and at the end of a wine club membership lead to higher levels of customer satisfaction and a desire to recommend the club to others even after quitting. Though variety seeking is more commonplace among experienced wine drinkers, the good news for wineries is that consumers are more likely to recommend a wine club to others if at least a year has passed after they decided to quit.Practical implications -The results provide implications for wine club managers seeking to improve wine club retention with suggested means for mitigating the rate of customer attrition.Originality/value -This paper presents original research addressing a variety of reasons why wine club members quit. The extant research has found that factors such as product quality, fair pricing, service commitments and variety-seeking behavior affect members' satisfaction with their wine club, as well as their desire to recommend it to others. The authors have attempted to combine all these factors into a single study to gain insight into wine club members' switching behavior, and to find out what the wineries can do to improve customer loyalty.

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How to grow a brand: Retain or acquire customers?

Cited by 41 publications

References 23 publications

The Impact of Word of Mouth on Intention to Purchase Currently Used and other Brands

The Impact of Word of Mouth on Intention to Purchase Currently Used and other Brands

Brand growth in packaged goods markets: Ten cases with common patterns

Defecting wine club members: an exploratory study

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