Customer Engagement Behavior: Theoretical Foundations and Research Directions

1. Customer Engagement Behavior: Theoretical Foundations and Research Directions Author-Jenny van Doorn1, Katherine N. Lemon2, Vikas Mittal3,Stephan Nass4, Doreen Pick5, Peter Pirner6, and Peter C. Verhoef1 Resource -Journal of Service Research,2010 Professor - Soe-TsyrYuan Presenter – Wayne Yang

2. Agenda • BackgroundandScope • Conceptual Model of Customer Engagement Behavior • DefinitionofCEB • DimensionofCEB • Model • Temporal Aspects OF CEB • CEBmanagement • Conclusion

3. Background • 1. CEOs are becoming wary of value-creating antics of financial managers who rely on techniques such as leveraging and financial restructuring (Aksoy et al. 2008; de Ruyter and Wetzels 2000). • 2.Marketing scholars have begun to focus on customer-based metrics for measuring organizational performance. =>Sustaining and nurturing the customer base may require the firm to look beyond repurchase behavior alone.

4. Scope • We seek to provide customer engagement behaviors (CEBs) as a construct, more than that a way of thinking, to capture how and why customers behave in numerous ways that are relevantto the firm and its multiple stakeholders. • Our approach provides a unifying framework to think about the numerous customer behaviors that have previously been examined on a piecemeal basis.

5. Conceptual Model of Customer Engagement Behavior-DefiningCEB • We posit that customer engagement behaviors go beyond transactions, and may be specifically defined as a customer’s behavioral manifestations that have a brand or firm focus • The behavioral manifestations, other than purchases, can be both positiveand negative. • Customer engagement also encompasses customer co-creation.

6. Conceptual Model of Customer Engagement Behavior-DefiningCEB • Customer engagement also embodies the exit and voice components of Hirschman’s (1970) classic model. • brand engagement as ‘‘an individual difference representing consumers’ propensity to include important brands as part of how they view themselves’’ (p. 92). • (a) self-brand connection • (b) customer-brand relationships

8. Conceptual Model of Customer Engagement Behavior-Dimensions of CEB • 1.Valence, from a firm’s perspective customer engagement can be classified as positive or negative (Brady et al. 2006). • 2. The form and modality of customer engagement refers to the different ways in which it can be expressed by customers. • type of resources (e.g., time vs. money) • in-role behaviors, extra-role behaviors, and elective behaviors. • Another way to understand the scope of customer engagement is the type of firm/brand level outcomes that customers achieve.

9. Conceptual Model of Customer Engagement Behavior-Dimensions of CEB • 3. scope—temporal and geographic. • 4.The impact of CEBs on the firm and its constituents can be conceptualized in terms of the immediacy of impact, intensity of impact, breadth of impact, and the longevity of the impact.

10. Conceptual Model of Customer Engagement Behavior-Dimensions of CEB • 5.It is also helpful to consider the customer’s purpose when engaging, focusing on three questions: • to whom is the engagement directed, to what extent is the engagement planned? • to what extent are the customer’s goals aligned with the firm’s goals? • Is the customer’s behavior directed at the firm or some other constituent (such as government regulator, investors, customers, or competitors)?

12. Conceptual Model of Customer Engagement Behavior-Customer-Based Factors Affecting CEB • Satisfaction • Trust/commitment • Identity • Consumption goals(ex:gettingthebestdealduringvacation) • Resources(ex:time,money) • Perceived costs/benefits

13. Conceptual Model of Customer Engagement Behavior-Firm-Based Factors Affecting CEBs • Brand characteristics • Firm reputation • Firm size/diversification • Firm information usage and processes • Ex:GoogleandApple • Industry

14. Conceptual Model of Customer Engagement Behavior-Context-Based Factors Affecting CEB • Competitive factors • Ex:comparativead • P.E.S.T. • Political(ex:encouragingorinhibitinginformationflow) • Economic/environmental (ex:earthquake) • Social (ex:media) • Technological

15. Conceptual Model of Customer Engagement Behavior-The Moderating Role of Antecedents • We posit that different antecedents can also moderate the effect of each other on CEBs. • While many of these factors can directly affect CEBs, it is important to understand and consider the idea that these factors can interact with each other to jointly affect CEBs. • Clearly, theoretical and empirical work in this area is necessary to further develop this idea.

17. Conceptual Model of Customer Engagement Behavior-Consequences for Customers • Cognitive • (WIKI: cognition is a group of mental processes that includes attention, memory, producing and understanding language, learning, reasoning, problem solving, and decision making.) • Attitudinal • (WIKI: An attitude can be defined as a positive or negative evaluation of people, objects, event, activities, ideas, or just about anything in your environment) • Emotional • Physical/Time ex: time, money, and effort • Identity ex:biker

18. Conceptual Model of Customer Engagement Behavior-Consequences for Firms • Financial ex: referral may cause more buying • Reputational • Regulatory ex: often negativeexperience • Competitive • Employee ex: suggestions from customers • Product ex: co-create

19. Conceptual Model of Customer Engagement Behavior-Other Consequence • Consumer welfare ex: customer complaints • Economic surplus • Social surplus • Regulation ex: customer complaints • Cross-brand/Cross-customer • utilization of information in the public domain can affect the entire industry.

20. Temporal Aspects OF CEB-CEB Development Over Time • While commitment gradually develops in a relationship, passion usually occurs at the start of the relationship and may subsequently diminish and occur irregularly. • Ex:WOM,House, Services

21. Temporal Aspects OF CEB-Factors Affecting CEB Over Time • the main factors affecting CEB over time is the change in a customer’s relative dependency on the particular product or service category. • Ex:healthcare • One might also argue that the relative importance of attitudes influencing CEBs may change during the course of the relationship with a firm. • Ex: Verhoef, Franses, and Hoekstra (2002) did not find any evidence for a moderating effect of relationship age on the effect of relational attitudes

22. Temporal Aspects OF CEB-Factors Affecting CEB Over Time • Changes in the level of dependency may also affect the customers’ sensitivity to positive or negative disconfirmation based on performance outcomes. • Ex: finance crisis • In many cases, particularly for services or durable goods, customers have multiple experiences with the same brand over time. As the relative quality of the experience changes, so does the likelihood of CEBs. • Negative + Negative = more negative

23. Temporal Aspects OF CEB-Changes in Context • Changes in the customer and firm context can affect the level of CEBs over time, such as the available engagement options and costs of engagement. • Ex: Blockbuster vs. Netflix

24. Managing CEB • Step 1: Identifying Engagement Behaviors and Customers • Step 2: Evaluating Engagement Manifestations • Ex:CEBscorecard • Step 3: Acting on Customers’ Engagement Behavior • Ex:listencarefullyforthenegativefeedback

25. Conclusion • Provide a simple model for CEB for further research and for practical usage. • Give a practical step-by-step map to manage the CEB • Usingverbatthetopic • There are still many ground need further research. such as, interaction between antecedent factors, many managerial issues-amoresystematicwaytoidentifyCEB

26. Q&A

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