Understanding Customer Loyalty and Disloyalty The Effect of Loyalty-Supporting and -Repressing Factors (first edition sold out, 'print on demand' 60 €)

Customer loyalty has been a central topic of both marketing theory and practice for several decades. Customer disloyalty, or relationship ending, has received much less attention. Despite the close relation between customer loyalty and disloyalty, they have rarely been addressed in the same study. The thesis bridges this gap by focusing on both loyal and disloyal customers and the factors characterising them. Based on a qualitative study of loyal and disloyal bank customers in the Finnish retail banking market, both factors that are common to the groups and factors that differentiate between them are identified. A conceptual framework of factors that affect customer loyalty or disloyalty is developed and used to analyse the empirical data. According to the framework, customers’ loyalty status (behavioural and attitudinal loyalty) is influenced by positive, loyalty-supporting, and negative, loyalty-repressing factors. Loyalty-supporting factors either promote customer dedication, making the customer want to remain loyal, or act as constraints, hindering the customer from switching. Among the loyalty-repressing factors it is especially important to identify those that act as triggers of disloyal behaviour, making customers switch service providers. The framework further suggests that by identifying the sources of loyalty-supporting and -repressing factors (the environment, the provider, the customer, the provider-customer interaction, or the core service) one can determine which factors are within the control of the service provider. Attitudinal loyalty is approached through a customer’s “feeling of loyalty”, as described by customers both orally and graphically. By combining the graphs with behavioural loyalty, seven customer groups are identified: Stable Loyals, Rescued Loyals, Loyals at Risk, Positive Disloyals, Healing Disloyals, Fading Disloyals, and Abrupt Disloyals. The framework and models of the thesis can be used to analyse factors that affect customer loyalty and disloyalty in different service contexts. Since the empirical study was carried out in a retail bank setting, the thesis has managerial relevance especially for banks. Christina Nordman is associated with CERS, Center for Relationship Marketing and Service Management at the Swedish School of Economics and Business Administration. The doctoral thesis is part of the Göran Collert Research Project in Customer Relationships and Retail Banking and has been funded by The Göran Collert Foundation.

Fading Customer Relationships

This dissertation is based on the assumption that fading customer relationships are important phenomena to understand in order for companies to prevent a future relationship termination, manage a desired relationship termination, or manage the situation where the relationship strength temporarily or permanently has weakened but where the customer still stays with the same service provider. It is assumed that fading could take different forms and develop through a range of different processes. The purpose of the thesis is therefore to define and describe fading, reveal different types of fading relationship processes, and discuss the dynamics of these processes. In services literature there is a lack of research focusing on the weakening of customer relationships. Fading therefore represents a new approach to understanding issues related to the ending of customer relationships. A fading relationship process could precede a relationship ending, but could also represent a temporal weakening of the relationship without leading to termination. It thus distinguishes the concept from other concepts within ending research which focus solely on relationships that have been terminated, taking a larger aspect of the relationship into account (as a relationship could build on constant changes). A pilot study created an understanding of difficulties related to understanding and detecting fading customer relationship, which led to a follow-up study incorporating qualitative interviews in relationship dyads characterised as fading with both private banking customers and their respective financial advisor. The focus remained on the understanding of the fading process resulting in a model for analysing different types of fading processes. Four types of fading processes were also revealed; the crash landing process, the altitude drop process, the fizzle out process and the try out process. The dissertation contributes to a broadened understanding of different types of fading processes within the research area of ending relationships emphasising the dynamic aspects of the phenomenon. Managerial implications include the management of different types of fading processes and also the understanding of the financial advisor’s role in influencing the development of these processes. Helena Åkerlund is associated with CERS, the Centre for Relationship Marketing and Service Management at Hanken, Swedish School of Economics and Business Administration, Helsinki

Image Heritage - The Temporal Dimension in Consumers' Corporate Image Constructions

Images and brands have been topics of great interest in both academia and practice for a long time. The company’s image, which in this study is considered equivalent to the actual corporate brand, has become a strategic issue and one of the company’s most valuable assets. In contrast to mainstream corporate branding research focusing on consumerimages as steered and managed by the company, in the present study a genuine consumer-focus is taken. The question is asked: how do consumers perceive the company, and especially, how are their experiences of the company over time reflected in the corporate image? The findings indicate that consumers’ corporate images can be seen as being constructed through dynamic relational processes based on a multifaceted network of earlier images from multiple sources over time. The essential finding is that corporate images have a heritage. In the thesis, the concept of image heritage is introduced, which stands for the consumer’s earlier company-related experiences from multiple sources over time. In other words, consumers construct their images of the company based on earlier recalled images, perhaps dating back many years in time. Therefore, corporate images have roots - an image heritage – on which the images are constructed in the present. For companies, image heritage is a key for understanding consumers, and thereby also a key for consumer-focused branding strategies and activities. As image heritage is the consumer’s interpretation base and context for image constructions here and now, branding strategies and activities that meet this consumer-reality has a potential to become more effective. This thesis is positioned in the tradition of The Nordic School of Marketing Thought and introduces a relational dynamic perspective into branding through consumers’ image heritage. Anne Rindell is associated to CERS, the Center for Relationship Marketing and Service Management at the Swedish School of Economics and Business Administration.

Use of Customer Information: An Ethnography in Service Development

Service researchers have repeatedly claimed that firms should acquire customer information in order to develop services that fit customer needs. Despite this, studies that would concentrate on the actual use of customer information in service development are lacking. The present study fulfils this research gap by investigating information use during a service development process. It demonstrates that use is not a straightforward task that automatically follows the acquisition of customer information. In fact, out of the six identified types of use, four represent non usage of customer information. Hence, the study demonstrates that the acquisition of customer information does not guarantee that the information will actually be used in development. The current study used an ethnographic approach. Consequently, the study was conducted in the field in real time over an extensive period of 13 months. Participant observation allowed direct access to the investigated phenomenon, i.e. the different types of use by the observed development project members were captured while they emerged. In addition, interviews, informal discussions and internal documents were used to gather data. A development process of a bank’s website constituted the empirical context of the investigation. This ethnography brings novel insights to both academia and practice. It critically questions the traditional focus on the firm’s acquisition of customer information and suggests that this focus ought to be expanded to the actual use of customer information. What is the point in acquiring costly customer information if it is not used in the development? Based on the findings of this study, a holistic view on customer information, “information in use” is generated. This view extends the traditional view of customer information in three ways: the source, timing and form of data collection. First, the study showed that the customer information can come explicitly from the customer, from speculation among the developers or it can already exist implicitly. Prior research has mainly focused on the customer as the information provider and the explicit source to turn to for information. Second, the study identified that the used and non-used customer information was acquired both previously, and currently within the time frame of the focal development process, as well as potentially in the future. Prior research has primarily focused on the currently acquired customer information, i.e. within the timeframe of the development process. Third, the used and non-used customer information was both formally and informally acquired. In prior research a large number of sophisticated formal methods have been suggested for the acquisition of customer information to be used in development. By focusing on “information in use”, new knowledge on types of customer information that are actually used was generated. For example, the findings show that the formal customer information acquired during the development process is used less than customer information already existent within the firm. With this knowledge at hand, better methods to capture this more usable customer information can be developed. Moreover, the thesis suggests that by focusing stronger on use of customer information, service development processes can be restructured in order to facilitate the information that is actually used.

Sensemaking in the Third Space - Essays on French-Finnish Bicultural Experiences in Organizations and Their Narratives (summary section only)

Research on cross-cultural and intercultural aspects in organizations has been traditionally conducted from an objectivist, functionalist perspective, with culture treated as an independent variable, and often the key explanatory factor. In order to do justice to the ontological relativity of the phenomena studied, more subjectivist research on intercultural interactions, and especially on their relationships with the dynamics of cultural identity construction, is needed. The present research seeks to address this gap by focusing on bicultural interactions in organizations, as they are experienced by the involved individuals. It is argued that such bicultural situations see the emergence of a space of hybridity, which is here called a ‘third space’, and which can be understood as providing ‘occasions for sensemaking’: it is this individual sensemaking that is of particular interest in the empirical narrative study. A first overall aim of the study is to reach an understanding of the dynamics of bicultural interactions in organizations; an understanding not only of the potential for learning and emancipatory sensemaking, but also of the possibility of conflict and alienatory ordering (this is mainly addressed in the theoretical essays 1 and 2). Further, a second overall aim of the study is to analyze the reflexive identity construction of four young French expatriates involved in such bicultural interactions in organizations in Finland, in order to examine the extent to which their expatriation experiences have allowed for an emancipatory opportunity in their cases (in essays 3 and 4). The primary theoretical contribution in this study lies in its new articulation of the dynamics of bicultural interactions in organizations. The ways in which the empirical material is analyzed bring about methodological contributions: since the expatriates’ accounts are bound to be some kind of construction, the analysis is made from angles that point to how the self-narratives construct reality. There are two such angles here: a ‘performative’ one and a ‘spatial’ one. The most important empirical contributions lie in the analysis of, on the one hand, the alternative uses that the young expatriates made of the notion of ‘national culture’ in their self-narratives, and, on the other hand, their ‘narrative practices of the third space’: their politics of escape or stabilization, their exploration of space or search for place, their emancipation from their origin or return to home as only horizon.

Performance Persistence of International Stock Funds

People saving in mutual funds often look at historical performance before they decide which funds to invest in. The implicit assumption made is that superior performance is likely to be repeated in the future. The findings presented in this study, which investigates funds sold on the Swedish market, support such an approach provided that the time horizons are limited to one year. International stock funds that have performed strongly one year are likely to outperform their peers also the following years. But if the historical and future time horizons are extended to two or three years, the positive relationship between past and future performance vanishes in most cases. Persistence tests focusing on the aggregated performance of fund companies were also carried out. These tests produced results rather similar to those on the individual fund level.

Towards a Dynamic Communication Model: A Useful Tool in Relationship Communication

In order to bring insight into the emerging concept of relationship communication, concepts from two research traditions will be combined in this paper. Based on those concepts a new model, the dynamic relationship communication model, will be presented. Instead of a company perspective focusing on the integration of outgoing messages such as advertising, public relations and sales activities, it is suggested that the focus should be on factors integrated by the receiver. Such factors can be historical, future, external and internal factors. Thus, the model put a strong focus on the receiver in the communication process. The dynamic communication model is illustrated empirically using it as a tool on 78 short stories about communication. The empirical findings show that relationship communication occurs in some cases; in some cases it does not occur. The model is a useful tool in displaying relationship communication and how it differs from other communication. The importance of the time dimension, historical and future factors, in relationship communications is discussed. The possibility of reducing communications costs by the notion of relationship communication is discussed in managerial implications.

Customer Relationship Dissolution - What Do We Know and What Do We Need to Know?

Our paper can be seen as a supplement to Halinen-Kaila and Tähtinen' s (2000) review of different direct research approaches on the ending of exchange relationships. Our purpose is to illuminate the borderline between research explicitly focusing on ending and research implicitly considering ending of relationships. Another purpose is to give an overview of how researchers within the Nordic School of Service Management and Nordic School of Relationship Marketing have approached customer relationship ending. A third purpose is to put forward a managerial perspective and managerial issues related to relationship ending. Finally we present some conclusions regarding further research avenues concerning relationship ending.

Customer Commitment and Key Account Management

What is the nature of customer commitment in business-to-business relationships and what are its antecedents? What Key Account Management practices help to build customer commitment? Commitment is an important element of Key Account Management since customer relationships are built upon a the foundation of commitment. Building long-term key account relationships occurs by enhancing and maintaining their commitment. Customer commitment has various antecedents, and managing commitment involves focusing on these antecedents. This paper explains the nature of commitment and describes its antecedents. It also suggests how to manage each of these antecedents to strengthen customer commitment.

Despairing Justice and the Ethics of Legal Interpretation

This study discusses legal interpretation. The question is how legal texts, for instance laws, statutes and regulations, can and do have meaning. Language makes interpretation difficult as it holds no definite meanings. When the theoretical connection between semantics and legal meaning is loosened and we realise that language cannot be a means of justifying legal decisions, the responsibility inherent in legal interpretation can be seen in full. We are thus compelled to search for ways to analyse this responsibility. The main argument of the book is that the responsibility of legal interpretation contains a responsibility towards the text that is interpreted (and through the mediation of the text also towards the legal system), but not only this. It is not simply a responsibility to read and read well, but it transcends on a broader scale. It includes responsibility for the effects of the interpretation in a particular situation and with regard to the people whose case is decided. Ultimately, it is a responsibility to do justice. These two aspects of responsibility are conceptualised here as the two dimensions of the ethics of legal interpretation: the textual and the situational. The basic conception of language presented here is provided by Ludwig Wittgenstein s later philosophy, but the argument is not committed to only one philosophical tradition. Wittgenstein can be counterpointed in interesting ways by Jacques Derrida s ideas on language and meaning. Derrida s work also functions as a contrast to hermeneutic theories. It is argued that the seed to an answer to the question of meaning lies in the inter-personal and situated activity of interpretation and communication, an idea that can be discerned in different ways in the works of Wittgenstein, Derrida and Hans-Georg Gadamer. This way the question of meaning naturally leads us to think about ethics, which is approached here through the philosophy of Emmanuel Levinas. His thinking, focusing on topics such as otherness, friendship and hospitality, provides possibilities for answering some of the questions posed in this book. However, at the same time we move inside a normativity where ethics and politics come together in many ways. The responsibility of legal interpretation is connected to the political and this has to be acknowledged lest we forget that law always implies force. But it is argued here that the political can be explored in positive terms as it does not have to mean only power or violence.

Many Faces of Mao Zedong

The main aim of this work was to explore the use of Mao Zedong s (毛泽东, 1893—1976) visual image in contemporary Chinese art during the years 1976—2006. Chairman Mao is the most visually reproduced person in the People's Republic of China (PRC), and the presence of his image is still unquestionable at many levels. Although several scholars have provided insightful observations on this topic, research focusing on Mao's visual image has been neglected. Employing the interdisciplinary approach of visual studies and using image as the main concept, this research combines different theoretical frameworks, deriving from art history, image studies and social sciences, for each chapter in order to explain the origins, intentions and major strategies of the contemporary Chinese artists. The focus of this research was to elucidate how Mao's visual image, deriving from the Maoist era, is re-created and negotiated in contemporary Chinese art works. The material reproductions - the visual images in contemporary art - are created to be juxtaposed with the immaterial mental images of Mao that were created during the Maoist era through the original visual images of Mao. This complex interaction between visual and mental images is further exemplified by art works that do not include Mao's visual image, but still imply his mental image. The methods used derive from both sinology and art history. The research is based on extensive fieldwork in China, which was crucial for gathering new information and materials from this vigorous art scene. The topic is approached through a Chinese cultural, political and historical perspective that is necessary for a further understanding of how the original visual images of Mao obtained their omnipotent status and what kind of iconography was created. Close structural analysis, taking into account the format, style, techniques, composition, colors, materials and space used in the art works, is employed to demonstrate the great variety of visual images created. The analysis is further placed in a continuous dialogue both with the contemporary art works of Mao and with the original visual images of Mao from the past. In this study it is shown that contemporary Chinese art relating to Chairman Mao is a more versatile and multilayered phenomenon than is generally assumed. Although some of the art works seem to fit into the definition of superficial art, the study demonstrates that this reading of the art works is not adequate. The author argues that employing Mao's visual images in contemporary Chinese art is based on three main strategies used by artists: to create a visual dialogue with a traumatizing past, to employ transcontextual parody, and to explore the importance of Tian'anmen through site-dependent art. These strategies are not exclusionary, but instead interdependent and many art works employ more than one of them. In addition, these three main strategies include versatile methods used by artists that make the use of Mao's visual images even more multifaceted.

Designing Creativity Through Clusters - A periodisation of cluster discourse

The thesis focuses on one of the most dominant articulations of the relation between geographical place and development, clusters - internationally competing place-bound economic system of production in related industries. The dominant articulation of cluster discourse represents the subnational region as a system of production, and as a means for competitiveness for Western countries. Its reproduction in theories has become one of the most prolific exports of economic geography to other disciplines and for policymaking. By analysing cluster discourse the thesis traces how the languages and processes of globalization have over time altered the understandings of the relation between geographical place and the economy. It shows how in its latest incarnation of the cluster discourse, the language of mainstream economics is combined with ‘softer’ elements (e.g. community, learning, creativity) in the economic geographic discourse. This is typical for the idea of soft capitalism, wherein it is assumed that economic success emanates from soft characteristics, such as knowledge, learning and creativity, rather than straightforward technological or cost advantages. A reoccurring critique against the dominant understanding of the relationship between competitiveness and regions, as articulated in cluster discourse, has pinpointed the perspective’s inability to reconcile the respective and reciprocal roles of local standard of living with firm competitiveness. The thesis traces how such critique is increasingly appropriated through the fusion of the economic, social and cultural landscape into the language of capitalism. It shows how cluster discourse has appropriated its critique, by focusing on creativity, with its strong associations to arts, individual artists and the cultural sphere in general, while predominantly creating its meaning in relation to competitiveness. The thesis consists of six essays that each outlines the development of the cluster discourse. The essays show how meaning systems and strategies are created, accepted and naturalized in cluster discourse, how this affects individuals, the economic landscape and society at large, as well as showing which understandings are marginalized in the process. The thesis argues that clusters are a) inseparable from ideology and politics and b) they are the result of purposeful social practice. It calls for increased reflexivity within corporate and economic geographic research on clusters, and underlines the importance of placing issues of power at the centre of analysis.

Post-acquisition Integration as Sensemaking: Glimpses of Ambiguity, Confusion, Hypocrisy, and Politicization

Though many studies have examined post-acquisition integration challenges, they have mainly focused on rationalistic explanations for the difficulties encountered in post-acquisition integration. There remains little knowledge of how the ‘irrational’ features of post-acquisition decision-making may impede organizational integration. This study attempts to bridge that gap by examining post-acquisition decision-making from a sensemaking perspective. The paper presents an in-depth analysis of a merger between a large Finnish furniture manufacturer and three smaller Swedish furniture companies. By focusing on the sensemaking processes surrounding integration issues, we uncover four interrelated tendencies that illuminate why the frequent problem of slow progress during post-acquisition integration occurs: inherent ambiguity concerning integration issues; cultural confusion in social interaction and communication; organizational hypocrisy in integration decision-making; and the politicization of integration issues.

Profitable Customer Management: A Study in Retail Banking

The increasing focus of relationship marketing and customer relationship management (CRM) studies on issues of customer profitability has led to the emergence of an area of research on profitable customer management. Nevertheless, there is a notable lack of empirical research examining the current practices of firms specifically with regard to the profitable management of customer relationships according to the approaches suggested in theory. This thesis fills this research gap by exploring profitable customer management in the retail banking sector. Several topics are covered, including marketing metrics and accountability; challenges in the implementation of profitable customer management approaches in practice; analytic versus heuristic (‘rule of thumb’) decision making; and the modification of costly customer behavior in order to increase customer profitability, customer lifetime value (CLV), and customer equity, i.e. the financial value of the customer base. The thesis critically reviews the concept of customer equity and proposes a Customer Equity Scorecard, providing a starting point for a constructive dialog between marketing and finance concerning the development of appropriate metrics to measure marketing outcomes. Since customer management and measurement issues go hand in hand, profitable customer management is contingent on both marketing management skills and financial measurement skills. A clear gap between marketing theory and practice regarding profitable customer management is also identified. The findings show that key customer management aspects that have been proposed within the literature on profitable customer management for many years, are not being actively applied by the banks included in the research. Instead, several areas of customer management decision making are found to be influenced by heuristics. This dilemma for marketing accountability is addressed by emphasizing that CLV and customer equity, which are aggregate metrics, only provide certain indications regarding the relative value of customers and the approximate value of the customer base (or groups of customers), respectively. The value created by marketing manifests itself in the effect of marketing actions on customer perceptions, behavior, and ultimately the components of CLV, namely revenues, costs, risk, and retention, as well as additional components of customer equity, such as customer acquisition. The thesis also points out that although costs are a crucial component of CLV, they have largely been neglected in prior CRM research. Cost-cutting has often been viewed negatively in customer-focused marketing literature on service quality and customer profitability, but the case studies in this thesis demonstrate that reduced costs do not necessarily have to lead to lower service quality, customer retention, and customer-related revenues. Consequently, this thesis provides an expanded foundation upon which marketers can stake their claim for accountability. By focusing on the range of drivers and all of the components of CLV and customer equity, marketing has the potential to provide specific evidence concerning how various activities have affected the drivers and components of CLV within different groups of customers, and the implications for customer equity on a customer base level.

Dimensions of University Student Learning in Medicine and Pharmacy

Study orientations in higher education consist of various dimensions, such as approaches to learning, conceptions of learning and knowledge (i.e. epistemologies), self-regulation, and motivation. They have also been measured in different ways. The main orientations typically reported are reproducing and meaning orientations. The present study explored dimensions of study orientations, focusing in particular on pharmacy and medicine. New versions of self-report instruments were developed and tested in various contexts and in two countries. Furthermore, the linkages between study orientations and students epistemological development were explored. The context of problem-based (PBL) small groups was investigated in order to better understand how collaboration contributes to the quality of learning. The participants of Study I (n=66) were pharmacy students, who were followed during a three-year professionally oriented program in terms of their study orientations and epistemologies. A reproducing orientation to studying diminished during studying, whereas only a few students maintained their original level of meaning orientation. Dualism was found to be associated with a reproducing orientation. In Study II practices associated with deep and surface approaches to learning were measured in two differing ways, in order to better distinguish between what students believed to be useful in studying, and the extent to which they applied their beliefs to practice when preparing for examinations. Differences between domains were investigated by including a sample of Finnish and Swedish medical students (n=956) and a Finnish non-medical sample of university students (n=865). Memorizing and rote learning appeared as differing components of a surface approach to learning, while understanding, relating, and critical evaluation of knowledge emerged as aspects of a deep approach to learning. A structural model confirmed these results in both student samples. Study III explored a wide variety of dimensions of learning in medical education. Swedish medical students (n=280) answered the questionnaire. The deep approach to learning was strongly related to collaboration and reflective learning, whereas the surface approach was associated with novice-like views of knowledge and the valuing of certain and directly applicable knowledge. PBL students aimed at understanding, but also valued the role of memorization. Study IV investigated 12 PBL tutorial groups of students (n=116) studying microbiology and pharmacology in a medical school. The educational application was expected to support a deep approach to learning: Group members course grades in a final examination were related to the perceived functioning of the PBL tutorial groups. Further, the quality of cases that had been used as triggers for learning, was associated with the quality of small group functioning. New dimensions of study orientations were discovered. In particular, novel, finer distinctions were found within the deep approach component. In medicine, critical evaluation of knowledge appeared to be less valued than understanding and relating. Further, collaboration appeared to be closely related to the deep approach, and it was also important in terms of successful PBL studying. The results of the studies confirmed the previously found associations between approaches to learning and study success, but showed interesting context- and subgroup-related differences in this respect. Students ideas about the nature of knowledge and their approaches to learning were shown to be closely related. The present study expanded our understanding of the dimensions of study orientations, of their development, and their contextual variability in pharmacy and medicine.