Factors Affecting Customer Profitability: a Bibliometric Study

The first objective of the thesis is to find out which factors impact on customer profitability has been studied in scientific articles. The second objective is to find out the main authors and publishers from the subject area. Expectations were to find factors from marketing and management accounting literature, but this study did not succeed to gather management accounting perspective on the subject area. This study used bibliometric methods. The data for this study was collected manually from Scopus and Web of Science databases. Search words resulted 770 articles and from those 82 were included to further analyze. Descriptive analysis, citation analysis and content analysis were made. Bibexcel and Pajek software were used in this study. Publication activity was concentrated on years 2004-2013. The most productive author around the subject area is Kumar Vipin from Georgia State University (USA). A multiple customer profitability factors were identified. A lot of research was made for example about satisfaction, relationship duration, loyalty, marketing actions and customer equity drivers. The research is concentrated on service sector. The results are suggesting that there are research gaps in business-to-business and manufacturing sector.

Collaborative Customer Relationship Management in Business-to-Business Firm's Strategy

The objective of this thesis is to study the presence of collaborative customer relationship management in a firm’s strategy. In addition the thesis explains specific implementations of collaborative CRM, and CRM in general, by each case company. The sample consists of five Finnish business-to-business companies through applying multiple-case study method. The data is collected through face-to-face interviews with employees knowledgeable of the case company’s CRM processes. The qualitative data is analyzed through coding and shows that two out of five case companies have adopted and are using collaborative CRM in their strategy and operations. These case companies see collaborative CRM as an important driver for the company, through customer focus and market orientation. The rest of the case companies are either in the process of moving towards collaborative CRM or have given little consideration to it. The results show that collaborative CRM is in use, and that each company modifies it to meet their exact aspirations. The major challenge in the process is to fully grasp the importance of a shared vision that can translate into collaborative efforts in CRM and business strategy.

What do Sports Sponsors Really Want? The effects of service quality, service value and customer satisfaction on behavioral intentions in sports sponsorship context

The aim of this Master’s thesis was to study the antecedents of customer satisfaction and behavioral intentions and their relative relationships in the sports sponsorship context. The possible antecedents under investigation in the current research are service value and service quality. As the academic background in the sports sponsorship literature is still rather modest there was a need for further empirical testing. The theoretical part of the research builds on the existing services marketing literature with sports sponsorship and business-to-business contexts in mind. The empirical study focused on the case company Liiga-SaiPa Oy. The data for the empirical analysis was collected via quantitative online survey. The total sample consisted of 357 the case company’s business customers and a total of 80 usable responses were collected. The data was analyzed by using statistical analysis software, SPSS. According to the results of the empirical analysis the most important antecedent of behavioral intentions in the underlying context is customer satisfaction. Also service value was found to have a direct and positive relationship with behavioral intentions. Moreover no indirect relationships through satisfaction were found between service quality and service value and behavioral intentions. However both constructs of service value and service quality were diagnosed to have a direct and positive effect on customer satisfaction. Service quality was also found to be a direct antecedent of service value with other service value benefits. However a contradicting finding with the current literature was, that service value sacrifices were not found to have a significant relationship with overall service value perceptions.

Integrating Use of Customer Information Throughout Multiple Sales Channels to Create Customer Competence

Customer knowledge management (CKM) practices enable organizations to create customer competence with systematic use of customer information that is integrated throughout the organization. Nonetheless, organizations are not able to fully exploit the vast amount of data available. Previous research on use of customer information is limited especially in a multichannel environment. The aim of this study was to identify the main obstacles for utilizing customer information efficiently across multiple sales channels. The study was conducted as a single case study in order to gain deeper understanding of the research problem. The empirical findings indicate that lack of CKM practices and a common goal are major challenges obstructing effective utilization of customer information. Furthermore, decentralized organizational structure and insufficient analytical skills create obstacles for information sharing and capabilities to process information and create new knowledge. The implications of the study suggest that in order to create customer competence organizations should shift their focus from technology to the organizational factors affecting use of information and implement CKM practices throughout the organization.

Customer orientation of sales personnel: Implications for service quality

Prior customer orientation research has concentrated mainly on studying the economical potential of customer orientation to companies. Service quality research instead has concentrated on emphasizing the evaluation of service quality from the customer’s perspective. This means that the service providers lack important information regarding customer orientation and service quality they would need for managerial purposes such as selecting and training employees. Therefore, there is an emerging need to study how customer orientation and service quality relate to company processes, policies and employees, and this study answers to those calls. The objective of this study was to examine what is the role of sales personnel’s’ customer orientation in quality of service delivery and what features support the development of customer orientation among sales personnel. Also the components customer orientation were studied extensively in order to understand how they relate to service quality. The empiric part of the study was conducted as a qualitative research by interviewing seven sales people from operative, tactical and strategic levels of the case corporation in order to get a broader view for customer orientation. The findings propose that both organizational factors and individual factors are affecting customer orientation construct inseparably. Organizational factors are bundled in this study under standards, support and systems, whereas individual factors are formed of employees’ personal attributes, motivation and self-perceived decision making authority. The findings suggest that in the service delivery process at an operative level, customer orientation appears largely in the employees’ individualistic characteristics. Their social and technical skills and motivation to serve customers are the most identifiable factors for customer orientation and consequently, quality service. However, organizational standards, support and systems are strongly dictating the frames the operative sales people operate in, having an influence on how the employees are experiencing their decision making authority and in the end, customer orientation. When looking at the service delivery process at tactical and strategic levels, customer orientation is affecting mainly in the organizational constructs through setting standards, support and systems. However, tactical and strategic level employees influence the operative level through individual customer orientation components as well. The findings indicate that their emotion and personal interaction skills are affecting the overall service delivery process mainly through supervisor support and motivation of the operative level employees. Based on this study it can be argued that an organization can operate as a facilitator and create certain frames for customer oriented sales behavior through standards, support and systems. However, as the impact of individual customer orientation factors on sales people’s service quality seems decisive, from an organizational perspective it puts pressures on the recruitment.

Applying customer value measurement to a customer loyalty program: Case of implementing a key performance indicator based on customer value

In recent decade customer loyalty programs have become very popular and almost every retail chain seems to have one. Through the loyalty programs companies are able to collect information about the customer behavior and to use this information in business and marketing management to guide decision making and resource allocation. The benefits for the loyalty program member are often monetary, which has an effect on the profitability of the loyalty program. Not all the loyalty program members are equally profitable, as some purchase products for the recommended retail price and some buy only discounted products. If the company spends similar amount of resources to all members, it can be seen that the customer margin is lower on the customer who bought only discounted products. It is vital for a company to measure the profitability of their members in order to be able to calculate the customer value. To calculate the customer value several different customer value metrics can be used. During the recent years especially customer lifetime value has received a lot of attention and it is seen to be superior against other customer value metrics. In this master’s thesis the customer lifetime value is implemented on the case company’s customer loyalty program. The data was collected from the customer loyalty program’s database and represents year 2012 on the Finnish market. The data was not complete to fully take advantage of customer lifetime value and as a conclusion it can be stated that a new key performance indicator of customer margin should be acquired in order to profitably drive the business of the customer loyalty program. Through the customer margin the company would be able to compute the customer lifetime value on regular basis enabling efficient resource allocation in marketing.

The Impact of Electrical Capacity Market Mechanisms on Capacity Mobility and End Use Customer Pricing

Potential impacts of electrical capacity market design on capacity mobility and end use customer pricing are analyzed. Market rules and historical evolution are summarized to provide a background for the analysis. The summarized rules are then examined for impacts on capacity mobility. A summary of the aspects of successful capacity markets is provided. Two United States market regions are chosen for analysis based upon their market history and proximity to each other. The MISO region is chosen due to recent developments in capacity market mechanisms. The PJM region neighbors the MISO region and is similar in size and makeup. The PJM region has had a capacity market mechanism for over a decade and allows for a controlled comparison of the MISO region’s developments. Capacity rules are found to have an impact on the mobility of capacity between regions. Regulatory restrictions and financial penalties for the movement of capacity between regions are found which effectively hinder such mobility. Capacity market evolution timelines are formed from the historical evolution previously summarized and compared to historical pricing to inspect for a correlation. No direct and immediate impact on end use customer pricing was found due to capacity market design. The components of end use customer pricing are briefly examined.

Customer-driven service product development

This thesis studies customer-driven service product development and how to manage customer involvement in the service product development process. The theory part of this thesis is a literature review of the prior studies and the thesis also includes empirical evidence in the form of a case study about ABB.

Forecasting financial weather - can we foresee market sentiment? Spectrum of stock price behavior - NYSE case study

The desire to create a statistical or mathematical model, which would allow predicting the future changes in stock prices, was born many years ago. Economists and mathematicians are trying to solve this task by applying statistical analysis and physical laws, but there are still no satisfactory results. The main reason for this is that a stock exchange is a non-stationary, unstable and complex system, which is influenced by many factors. In this thesis the New York Stock Exchange was considered as the system to be explored. A topological analysis, basic statistical tools and singular value decomposition were conducted for understanding the behavior of the market. Two methods for normalization of initial daily closure prices by Dow Jones and S&P500 were introduced and applied for further analysis. As a result, some unexpected features were identified, such as a shape of distribution of correlation matrix, a bulk of which is shifted to the right hand side with respect to zero. Also non-ergodicity of NYSE was confirmed graphically. It was shown, that singular vectors differ from each other by a constant factor. There are for certain results no clear conclusions from this work, but it creates a good basis for the further analysis of market topology.

A Phase Model for Building a Customer Value Based Sales Tool – Case Mining and Metals Industry

The objective of this research is to observe the state of customer value management in Outotec Oyj, determine the key development areas and develop a phase model with which to guide the development of a customer value based sales tool. The study was conducted with a constructive research approach with the focus of identifying a problem and developing a solution for the problem. As a basis for the study, the current literature involving customer value assessment and solution and customer value selling was studied. The data was collected by conducting 16 interviews in two rounds within the company and it was analyzed by coding openly. First, seven important development areas were identified, out of which the most critical were “Customer value mindset inside the company” and “Coordination of customer value management activities”. Utilizing these seven areas three functionality requirements, “Preparation”, “Outotec’s value creation and communication” and “Documentation” and three development requirements for a customer value sales tool were identified. The study concluded with the formulation of a phase model for building a customer value based sales tool. The model included five steps that were defined as 1) Enable customer value utilization, 2) Connect with the customer, 3) Create customer value, 4) Define tool to facilitate value selling and 5) Develop sales tool. Further practical activities were also recommended as a guide for executing the phase model.

Marketing of fire suppression systems: customer value and institutional aspects

The paper studied marketing of automatic fire suppression systems from the perspectives of customer value and institutions. The object of the study was research the special features of the sales and marketing of fire suppression systems, and find some practical applications for sales, and for lobbying of a new fire suppression technology. The theoretical background of the study was in the customer value literature and the theoretical concept of institutional entrepreneurship. The research was conducted as an electronic survey for three different groups of respondents; end customers, solution integrators, and re-sellers. From the answers was gathered generalisations about the customer value assessment and communication of the value related to the sales and marketing processes of the fire suppression systems. In addition, there was observed manners to receive information about the systems, and effects caused by institutions to the decision making of the different parties involved. The findings of the study support companies that are launching a new safety technology to the market focus their marketing, and help to understand institutional forces that are affecting to a safety related product.

Forecasting financial weather - can we foresee market sentiment? Quantitative analysis of nodal prices in the New Zealand Electricity Spot Market

Time series of hourly electricity spot prices have peculiar properties. Electricity is by its nature difficult to store and has to be available on demand. There are many reasons for wanting to understand correlations in price movements, e.g. risk management purposes. The entire analysis carried out in this thesis has been applied to the New Zealand nodal electricity prices: offer prices (from 29 May 2002 to 31 March 2009) and final prices (from 1 January 1999 to 31 March 2009). In this paper, such natural factors as location of the node and generation type in the node that effects the correlation between nodal prices have been reviewed. It was noticed that the geographical factor affects the correlation between nodes more than others. Therefore, the visualisation of correlated nodes was done. However, for the offer prices the clear separation of correlated and not correlated nodes was not obtained. Finally, it was concluded that location factor most strongly affects correlation of electricity nodal prices; problems in visualisation probably associated with power losses when the power is transmitted over long distance.

The importance of customer's value expectations in customer acquisition

Pro gradu –tutkielman tavoitteena on tutkia asiakasarvoa ja sitä, miten asiakasarvoa voidaan käyttää hyväksi uusasiakashankinnassa. Tällä hetkellä kirjallisuudessa on pinnalla muutos tuotekeskeisyydestä asiakaskeskeiseen näkökulmaan, joka tunnistaa asiakasarvon tärkeyden bisnes suhteissa. Tämä tutkimus osallistuu kyseiseen keskusteluun muodostamalla tavan mitata asiakasarvoa, ja peilaamalla saavutettuja tuloksia uusasiakashankinta prosessiin. Empiirinen tutkimus on toteutettu kahdessa osassa: kvalitatiivisessa sekä kvantitatiivisessa. Ensimmäisessä osassa haastateltiin kahdeksaa potentiaalista asiakasta, minkä jälkeen saadut tulokset vietiin suurempaan skaalaan toteuttamalla kysely suurelle joukolle potentiaalisia asiakkaita. Lopulliset tulokset osoittavat, että asiakasarvon käyttäminen hyväksi uusasiakashankinnassa on erittäin tehokas ja käyttökelpoinen metodi. Asiakasarvoon perustuvat asiakassegmentit mahdollistavat oikeiden arvojen kommunikoinnin oikeille segmenteille. Se antaa yritykselle myös mahdollisuuden valita houkuttelevimmat asiakasryhmät ja vahvistaa asiakaskantaansa.

Study on Customer Perceived Value of Container Loading Equipment

The goal of the thesis was to gain understanding of organizational buying behavior and its effect from the selling perspective and to generate base for verifying customer value propositions for Actiw Oy. The first objective was to discover the current buying decision criteria of current customers to understand the buying motives which had led to the investment initially. Second objective was to understand how the buying decision criteria and customer experiences can be turned into customer value propositions. Research was done with 16 customer interviews, which were focused on obtaining the information on the buying center and the value of the solution. Thesis goes through the main theories of OBB and the theory behind customer value management. Based on customer interviews, the currently used customer value propositions were tested and categorized into points-of-parities and points-ofdifferences. The interviews confirmed customer behavior in new task and modified rebuy situations and also gave confirmation to the internally done customer value propositions. Main finding of the study was, that as the value propositions are possible to present more specifically to each new case instead of using all benefits at the same time.

Managing Customer Co-creation: Empirical Evidence from Finnish High-tech SMEs

The purpose of this thesis is to find out how customer co-creation activities are managed in Finnish high-tech SMEs by understanding managers’ views on relevant issues. According to theory, issues such as firm size, customer knowledge implementation, lead customers, the fuzzy front-end of product/service development as well as the reluctance to engage in customer co-creation are some of the field’s focal issues. The views of 145 Finnish SME managers on these issues were gathered as empirical evidence through an online questionnaire and analyzed with SPSS statistics software. The results show, firstly, that Finnish SME managers are aware of the issues associated with customer co-creation and are able to actively manage them. Additionally, managers performed well in regards to collaborating with lead customers and implemented customer knowledge evenly in various stages of their new product and service development processes. Intellectual property rights emerged as an obstacle deterring managers from engaging in co-creation. The results suggest that in practice managers would do well by looking for more opportunities to implement customer knowledge in the early and late stages of new product and service development, as well as by actively searching for lead customers.