Learn the Difference between

Transcription

1 Learn the Difference between Active and Passive Customers - Communicate your Products and Services Successfully Associate Professor Karlstad university, Sweden Consultant I&H Roos Ab, Oy Jakobstad, Finland

2 The knowledge of what actually happens when customers change from your business to other, or another type of service provider is important knowledge

3 Why and how can you benefit from that knowledge?

4 The insight that understanding customer relationship is important has existed for a long time in business. but it has been difficult to translate the Communications is such a function understanding of the specific features and functions into daily practices in companies

5 Important! Customer-relationship knowledge Communication with customers Thesetwohas to be combinedin order to influence loyalty! Important!

6 Why the result is different if you relate the customer experiences to actual behavior?, e.g: Customer-relationship knowledgebased in actual switching (actual behavior) Will you switch to a competitor rather than to stay AT MY BUSINESS if the price level goes up? Direct question

7 The difference is due to customer relationship is a process You have no grasp of a process if not all parts are related to the same thing eg. actual behavior (changing behavior)

8 Conscious and unconscious thought processes Process and relevance The implication of the differences between active and passive customers is that the company must obtain information from customers that is relevant to understanding Understanding a switching process from the By knowing unconscious thought processes, we can design communication that reaches all customers - active and passive reality that all factors in the customer relationship is not equally important for loyalty - is the relevant information

9 Conscious and unconscious thought processes influence actual behavior differently The characters of active and passive customers influence loyalty differently

10 Knowing the difference between active and passive customers is thus important 1. An active customer has planned the switching 2. An active customer is looking for information and factual arguments in the comparison of products and services 1. A passive customer is approached by a competitor and make unplanned switching 2. A passive customer has very little knowledge of their service provider and competing service and products

11 An important part of understanding is the recognition of "different pictures" between company and customer (blind spot) Therefore, the difference will be about how to get information! Perceptions of actor 1 Perceptions of actor 2 Asymmetry causedby divergingperceptions between relationship actors

12 Blind spots in customer relationships Some suggest that the opposite eye compensates for the missing visual information. One of the most commonly accepted theories is that the brain actually fills in the missing information using visual cues in the environment. (Yes, I googledit )

13 How do we get information related to actual behavior and thereby has influence on loyalty?

14 Method SPAT Situational Influential Reactional Trigger Critical Contact Pusher, Swayer, Puller Process Critical Critical Critical Contact Contact Contact Outcome Critical Contact Contact Competitor Contact -Actual behavior -Triggers determine the stability of the outcome -Switching determinants less important for switching Switching Path SPAT (Switching Path Analysis Technique) Roos 1999

15 Changes in the customers lives -economy -family Situational Influential Reactional Market effect -active -passive Disturbances in the interaction between customers and companies

16 SPAT- (Switching Path Analysis Technique) Improvements when applying the SPAT - logic 1. Loyalty effect embedded in the results 2. Based on the loyalty effect: New studies can be initiated Loyalty-enhancing communication is possible to design

17 Background theoretical steps Variant of the CIT-technique labeled SPAT (Switching Path Analysis Technique) Empirical examples of the development of SPAT Customer Relationships Triggers(Sensitivity Factors) 1.Situational 2.Influential 3.Reactional Active and Passive

18 This knowledge is based on 15 years of research work and with 25 years of practical experience of customer relationships in business (owner of supermarket ( K-kauppias, ICA köpman)

19 SPAT Switching Path Analysis Technique - A method for defining company-specific customer relationships Developed by 25 years of experience from retailing, owning a supermarket 13 years of experience from research in marketing Customer relationships Method development Application of the developed method in different kinds of services

20 The 50 Most-Frequently Cited Articles in Journal of Service Research as of August 1, updated monthly Most-cited rankings are recalculated at the beginning of the month. Rankings are based on citations to articles on this journal site from articles in HighWire-hosted journals. 21. Timothy L. Keiningham, Tiffany Perkins-Munn, Heather Evans The Impact of Customer Satisfaction on Share-of-Wallet in a Business-to-Business Environment Journal of Service Research Aug 01, 2003; 6: (In "Article") [Abstract] [PDF] 22. Anna S. Mattila, Cathy A. Enz The Role of Emotions in Service Encounters Journal of Service Research May 01, 2002; 4: (In "Article") [Abstract] [PDF] 23. Aimee L. Drolet, Donald G. Morrison Do We Really Need Multiple-Item Measures in Service Research? Journal of Service Research Feb 01, 2001; 3: (In "Article") [Abstract] [PDF] 25! 24. Dwayne D. Gremler The Critical Incident Technique in Service Research Journal of Service Research Aug 01, 2004; 7: (In"Article")[Abstract][PDF] 25. Switching Processes in Customer Relationships Journal ofservice Research Aug 01, 1999; 2: (In "Article") [Abstract] [PDF]

21 Procedure background A process method SPAT - and an identified gap in the (F&A 1975) model TRA 1. The development regarding a process (dynamic) variant of the CIT-technique labeled SPAT (Switching Path Analysis Technique, Roos 1999) continued over many years from 1996 and showed gradually interesting results regarding category characteristics of customer relationships. The main categories, triggers possessed qualities to inform about the stability of the outcome state in customer relationships 2. The results were found to fill a gap in the Fishbein and Ajzen (1975) model The theory of reasoned action (TRA). 3. The gap was identified by Sheppard, Hartwick and Warshaw (1988) who pointed to the importance of anchoring the thought processes, generally, in actual behavior

22 Case presentation SPAT application to different industries

23 Setting Data collection Trigger Switching determinant Development level First case: 76 interviews Supermarket 84 switching stories Second case: 4 different settings 27 Situational triggers 36 Influential triggers 21 Reactional triggers Range of goods, Location, Price, Competitor, Merchandise, Design, Cocustomer, Failure of system, Policy, Variation, Product mix, Service policy, Failure of service, Atmosphere, Personnel, Habit, Queuing. The difference between triggers and switching determinants was established Banking 27 interviews 20 Situational 8 Loan conditions; 5 Service; Confirmation of the 4 Reactional 3 Influential Telecommunicatio 96 interviews 59 Influential 25 Situational ns 12 Reactional Insurance 80 interviews 39 Situational 21 Influential 20 Reactional The Swedish socialinsurance system Third case: Telecommunicati ons Longitudinal study over 6 years 4 Location of branches; 3 Loan negotiations; 3 Money transfer time stability of the categories in different settings 46 Price; 21 Customer support; Confirmation of the 10 Change in product use; 9 stability of the System failure categories in 44 Price; 8 Effortless negotiations; 10 Insurance terms; 5 Insurance bunching 100 interviews 21 Reactional Rules and bureaucracy Form design Routines of the socialinsurance bureau Unfriendly treatment Waiting time 140 interviews -annually over 6 years -switching stories relevant to this analysis include those told by respondents who started and ended with the same telecom operator At the end stations of the 6-year switching stories, when it was possible to assess stability, the trigger distribution was: 71 triggers Situational: 12 Active and 0 Passive Influential: 10 Active and 47 Passive Reactional: 2 Active and 0 Passive different settings Confirmation of the stability of the categories in different settings Changes in customer behavior not supportive of but with implication for stipulated routines. Verification of the of the influential trigger as either active or passive. Customers reacting to active triggers are more stable than those reacting to passive triggers. Empirical demonstration of the results of SPAT applications 1. Factors of the customer relationships assign different roles regarding loyalty 2. Applications to different industries 3. Not only different roles but, prediction of differences regarding the stability of the outcome state

24 Results outcome stability Roos and Gustafsson (2007) Active customers more stable in their All other active customers Count stability Stable trigger * activepassive * stability Crosstabulation activepassive Active Passive Total trigger situational influential relationships than Passive customers Passive customers influential reactional Total Unstable trigger situational influential influential reactional Total

25 Method trigger definitions related to outcome stability Roos and Gustafsson (2007) Situational triggers refer to changes in customers private situations that make them re-evaluate their existing relationship with the service provider Active and stable customers Passive and unstable customers Influential triggers can be seen in the behavior of frequent switchers, the paradox being that their arguments are confusing. The confusion is due to their poor knowledge about their current relationships. One group follows advertising and searches new alternatives (Active) Second group waits to be contacted by a competitor (Passive) Reactional triggers reflect customers increased inclinations to switch to a competitor after experiencing critical incidents.

26 Results outcome stability According to Ajzen and Fishbein (1991), factors should be separated in terms of influence on behavior in order to allow better prediction of future behavior. SPAT enables the influencing factors (situational, influential and reactional triggers) to be divided so as to enhance understanding of the future stability of customer Relationships (active/passive) Active customers were found to be more loyal than passive customers

27 A Model of planned and automatic decision processes focus on outcome stability (An extension of Ajzen s (1991) Model of Planned behavior ) Sensitivity -situational -reactional -influential Active Sensitivity -influential Passive Argumentation Behavior -stable -unstable

28 Unless the approach is clearly real behavior... we do not know if the results are of - importance for loyalty - perhaps having a communicative function

29 The ability to design a communication capable of reaching its goal.. depends on knowledge of customer relationships function

30 Knowing the difference between active and passive customers is thus important 1. An active customer has planned the switching 2. An active customer is looking for information and factual arguments in the comparison of products and services 1. A passive customer is approached by a competitor and make unplanned switching 2. A passive customer has very little knowledge of their service provider and competing service and products

31 Active and Passive Customers Does it apply equally to BtoB customers and Private customers?

32 Purpose PURPOSE of the study is to compare business and private customers choice processes CONTEXT of the study is air travel vs. other choices such as train, car or other airports FOCUS of the study is The airport as point of departure and Scandinavian hubs are major destination choices

33 The nature of the company-strategy model e.g. Van Weele (2005 Specify Select Contract Order The nature of the private-customers choice models e.g. Srinivasan (1987) The Customer Perceived factors in a focal travel company Car Train Other airport Other airport Other airport The perception of the market Other airpor t Other airport

34 Results Generally Findings indicate that: Business customers decision-process character does not equal the nature of a company-strategy models Business customers not as bound by company policies as first thought; the influence of the individual is quite strong

35 Choice factors with regard to switching Triggers Customer-perceived switching reasons Remember convenience! 1 Generally Company policy deteriorating service 2 New alliance partner 3 Closure of Copenhagen flight New alliance partner Price 4 Departure/Arrival time shortens family time Company moved office 5 Insecure future Decreased benefits regarding service 6 Price Departure/Arrival time shortens family time

36 We can t change the location of the airport We can communicate the airport better!

37 VF:s homepage Newspaper

38 VF:s homepage Newspaper

39 KCCC Conference center

40 KCCC Conference center

41 KCCC Conference center

42 KCCC Conference center

43 The first Newspaper homepage in Sweden to communicating a Swedish Airport The first Conference center in Sweden to communicating a Swedish Airport In order to find the loyalty enhancing communication the message has to be the right i.e. properly derived from actual behavior

44 Telecommunication Private customers Newsletter text modification customers ordinary Newsletter modified towards active customers modified towards passive customers

45 Test modifed text for communication Newsletters 2010 Yes, a start!

46 summary 1. The focus was on reaching customers in the way literature suggests 2. Do not underestimate price and price synonyms 3. Headlines should provide customer-relationship knowledge to passive customers

47 2011

48 Nyhetsbrev Landingpageclick relations Table 06 Action C Bredband kan få TV E Pris F Kvalitet SMS från din Juni fasta 2011 telefon helt gratis (C Bredband 1 kan få TV) SMSa Klick specifik 39,8 % 61,3 % 40,7 % - från fast artikel SMS mellan fasta telefoner telefon helt gratis Bredband i framkanten för alla 2 Mobilt Klickspecifik 5,5 % 6,3 % 5,7 % Till mobiltelefoner 69 öre/sms behov bredband artikel (Modifierat) 3 Fast bredband Klickspecifik artikel (C Bredband kan få TV) - 17,9 % Telia 8,1 % Bredband 36,7 i framkanten % Snabbaste bredbandsnäten upp till 1000 mb/s (Modifierat)

49 NYHETSBREV APRIL 2011 Hej! Nu är våren äntligen här på riktigt och vi har massor med erbjudanden, tips och inspiration för dig som Teliakund. Vi kan bland mycket annat erbjuda förmånliga priser på sol- och golfresor, paket till Dreamhack och här intill kan du läsa mer om hur du gratis kan skicka sms från din fasta telefon. Klicka dig vidare och ta del av allt exklusivt för just dig! Hälsningar från oss på Telia SMS från din fasta telefon helt gratis Så här gör du Ett bredband i framkant Läs mer Har du koll på trender? Dela med dig och vinn ett Spotify-abonnemang! Börja här Orolig för virus i din dator? Klicka här VIDEOBUTIKEN Skaffa digital-tv! Hyr film direkt från soffan Läs mer och beställ här All inclusive! Du som kund hos oss kan åka på en unik resa till Turkiet! Läs mer och boka här

50 NYHETSBREV APRIL 2011 Hej! Nu är våren äntligen här på riktigt och vi har massor med erbjudanden, tips och inspiration för dig som Teliakund. Vi kan bland mycket annat erbjuda förmånliga priser på sol- och golfresor, paket till Dreamhack och här intill kan du läsa mer om hur du gratis kan skicka sms från din fasta telefon. Klicka dig vidare och ta del av allt exklusivt för just dig! Hälsningar från oss på Telia SMS mellan fasta telefoner helt gratis Till mobiltelefoner 69 öre/sms Så här gör du Bredband i framkanten surfzoner Läs mer Gör din röst hörd! Vinn ett Spotifyabonnemang! Börja här VIDEOBUTIKEN Tusentals filmer direkt i din TV Hyr film från soffan Läs mer och beställ här All inclusive i Turkiet! Prisvärt erbjudande Läs mer och boka här Unikt golferbjudande För dig som är kund hos Telia Läs mer

51 We reached the customers! 2. Information about price and details related seems to have effect on opening and klicking 3.. called short-term behavior 4. Long-term behavior (loyalty) is the next step: analyze loyalty in the database and look more closely into customers patronizing and buying from purchase sites

52 Totally, customers response rates were enhanced 50 %!

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54 Loyalty-enhancing communication Do you want communication in your company to be: 1. An income or 2. An expense item?

55 Understand before measure!