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.

Customer driven business model – connecting customer value to firm resources in ICT value networks

The objective of this thesis is to provide a business model framework that connects customer value to firm resources and explains the change logic of the business model. Strategic supply management and especially dynamic value network management as its scope, the dissertation is based on basic economic theories, transaction cost economics and the resource-based view. The main research question is how the changing customer values should be taken into account when planning business in a networked environment. The main question is divided into questions that form the basic research problems for the separate case studies presented in the five Publications. This research adopts the case study strategy, and the constructive research approach within it. The material consists of data from several Delphi panels and expert workshops, software pilot documents, company financial statements and information on investor relations on the companies’ web sites. The cases used in this study are a mobile multi-player game value network, smart phone and “Skype mobile” services, the business models of AOL, eBay, Google, Amazon and a telecom operator, a virtual city portal business system and a multi-play offering. The main contribution of this dissertation is bridging the gap between firm resources and customer value. This has been done by theorizing the business model concept and connecting it to both the resource-based view and customer value. This thesis contributes to the resource-based view, which deals with customer value and firm resources needed to deliver the value but has a gap in explaining how the customer value changes should be connected to the changes in key resources. This dissertation also provides tools and processes for analyzing the customer value preferences of ICT services, constructing and analyzing business models and business concept innovation and conducting resource analysis.

The Contribution of Mobile Device Manufacturers’ Site Usage to Brand Satisfaction and Loyalty

Recently most of the mobile phone manufacturer companies started to pay extra attention to their websites. This research investigates the sources of value creation on the mobile phone manufacturers’ website and the affect visiting the manufacturers’ website has on brand loyalty and brand satisfaction. The results show a correlation between positive website usage experience, brand loyalty and brand satisfaction. Moreover there is a relation between Novelty, Efficiency, Lock-in and the perceived usefulness the manufacturers’ website has on the mobile phone device. And finally the main reason behind Finnish student’s mobile phone brand loyalty is its country of origin.

Customer loyalty in DIY retailing in Russia: Innovative approaches for improving customer retention through technology

Customer satisfaction has been widely studied concept due to its importance on business performance. Customer satisfaction should ideally lead to customer loyalty and have a positive effect on business profitability and growth. This study investigates customer satisfaction and loyalty in the Do-It-Yourself retailing in Russian  market.  “K-rauta”  retail  chain  was  chosen  as  a  focus company for this study. Goal of the study was to investigate what creates customer satisfaction in this given market and what is the role of quality, trust and satisfaction for creating customer loyalty. The role of internet in consumer purchasing process was also investigated. Furthermore, consumer preferences towards new marketing solutions such as smart phone applications were briefly examined.

Wireless Application Test Bed and Simulations for Broadband Mobile Communications Systems

Langattoman laajakaistaisen tietoliikennetekniikan kehittyminen on herättänyt kiinnostuksen sen ammattimaiseen hyödyntämiseen yleisen turvallisuuden ja kriisinhallinnan tarpeisiin. Hätätilanteissa usein olemassa olevat kiinteät tietoliikennejärjestelmät eivät ole ollenkaan käytettävissä tai niiden tarjoama kapasiteetti ei ole riittävä. Tästä syystä on noussut esiin tarve nopeasti toimintakuntoon saatettaville ja itsenäisille langattomille laajakaistaisille järjestelmille. Tässä diplomityössä on tarkoitus tutkia langattomia ad hoc monihyppy -verkkoja yleisen turvallisuuden tarpeiden pohjalta ja toteuttaa testialusta, jolla voidaan demonstroida sekä tutkia tällaisen järjestelmän toimintaa käytännössä. Työssä tutkitaan pisteestä pisteeseen sekä erityisesti pisteestä moneen pisteeseen suoritettavaa tietoliikennettä. Mittausten kohteena on testialustan tiedonsiirtonopeus, lähetysteho ja vastaanottimen herkkyys. Näitä tuloksia käytetään simulaattorin parametreina, jotta simulaattorin tulokset olisivat mahdollisimman aidot ja yhdenmukaiset testialustan kanssa. Sen jälkeen valitaan valikoima yleisen turvallisuuden vaatimusten mukaisia ohjelmia ja sovellusmalleja, joiden suorituskyky mitataan erilaisten reititysmenetelmien alaisena sekä testialustalla että simulaattorilla. Tuloksia arvioidaan ja vertaillaan. Multicast monihyppy -video päätettiin sovelluksista valita tutkimusten pääkohteeksi ja sitä sekä sen ominaisuuksia on tarkoitus myös oikeissa kenttäkokeissa.

ME - Mobile Electronic Personality

Digital services require personal information for a variety of reasons. Due to advances in communication technology, new types of services are evolving alongwith traditional Internet services. Due to the diversity of services, the traditional approaches to personal information handling designed for Internet services are inadequate. Therefore, new approaches are necessary. In this thesis, a solution where personal information is stored in and accessed from the user's mobile device is presented. This approach is called Mobile Electronic Personality (ME). The ME approach is compared to the existing approaches which rely on a database either at a service, a trusted third party or a client program. Various personal information properties are taken into account in the comparison of storage locations. The thesis presents both the internal and the communication architecture of the ME. The internal architecture defines how the information is stored in the mobile device. The communication architecture defines how the information can be accessed by different types of services from the ME. The use of the architecture is described for services in different environments. A simple ME based solution for the authentication of a user is defined. The authentication of service, which is required to protect the privacy of the users is also presented.

Mobile terminal adaptation in portal for better usability

Elektroniset finanssipalvelut, erityisesti Internetin kautta käytettynä, on kasvava alue. Elektronisten finanssipalveluiden tarjoajan tulee pystyä tarjoamaan laaja käytettävyys kaikkien kanavien kautta. Laajan käytettävyyden avulla asiakas voi valita haluamansa kanavan haluamanaan aikana. Palveluntarjoajalla tulee olla joustava arkkitehtuuri pystyäkseen tukemaan asiakkaiden muuttuvia vaatimuksia. Joustavalla arkkitehtuurilla päätelaitteeseen mukautuminen on mahdollista ja näin palveluntarjoaja pystyy tarjoamaan tuen monille eri päätelaitteille ja teknologioille helposti ja nopeasti. Diplomityö keskittyy tutkimaan mahdollisuutta monen kanavan tukeen ja päätelaitteeseen mukautumista Nordean tulevassa finanssiportaaliratkaisussa. Tämä pitäisi olla mahdollista uuden arkkitehtuurin kanssa, jonka TietoEnator on toteuttanut yhteistyössä Nordean kanssa. Sivujen rakenteen uudelleenjärjestelyillä saatiin hyviä tuloksia. Nykyisestä arkkitehtuurissa löydettiin myös puutteita ja jäljelle jäi avoimia kysymyksiä, jotka kirjattiin ylös. On selvästi nähtävissä, että tehokas päätelaitteeseen mukautuminen ja tuki monelle kanavalle tuo hyötyjä sekä pankille että asiakkaalle.

Effects of business-to-business customer orientation, satisfaction and retention on firm profitability

The objective of this master’s thesis was to examine the effect of customer orientation on customer satisfaction and how customer satisfaction and customer retention contribute to firm profitability. Beside customer orientation, also other antecedents of customer satisfaction, i.e. service quality, flexibility, trust and commitment, were investigated as control variables. Literature review revealed several research gaps concerning research of the key concepts. These research calls were also answered. The empirical study focused on one case company, a telecommunication expert. The data for the empirical part was collected with web-based questionnaire from case company’s business customers in January-February 2008. Sample (N=95) produced 59 answers, thus the response rate of the survey was 62,1%. The data was analyzed by using statistical analysis program, SPSS. As a conclusion, the results indicate that customer orientation do not affect customer satisfaction directly, but through service quality, flexibility and trust. Moreover, customer satisfaction has positive impacts on commitment and intentions to stay as a customer in the future, but not on profitability. In the present study, only past purchase behavior, measured with customer database measure, is positively related to firm profitability.

Multi-sensor Simultaneous Localization and Mapping

Simultaneous localization and mapping(SLAM) is a very important problem in mobile robotics. Many solutions have been proposed by different scientists during the last two decades, nevertheless few studies have considered the use of multiple sensors simultane¬ously. The solution is on combining several data sources with the aid of an Extended Kalman Filter (EKF). Two approaches are proposed. The first one is to use the ordinary EKF SLAM algorithm for each data source separately in parallel and then at the end of each step, fuse the results into one solution. Another proposed approach is the use of multiple data sources simultaneously in a single filter. The comparison of the computational com¬plexity of the two methods is also presented. The first method is almost four times faster than the second one.

Mobile Subscription Acquisition and Retention Costs - An Actvity-Based Model

The objective of this master’s thesis was to develop a model for mobile subscription acquisition cost, SAC, and mobile subscription retention cost, SRC, by applying activity-based cost accounting principles. The thesis was conducted as a case study for a telecommunication company operating on the Finnish telecommunication market. In addition to activity-based cost accounting there were other theories studied and applied in order to establish a theory framework for this thesis. The concepts of acquisition and retention were explored in a broader context with the concepts of customer satisfaction, loyalty and profitability and eventually customer relationship management to understand the background and meaning of the theme of this thesis. The utilization of SAC and SRC information is discussed through the theories of decision making and activity-based management. Also, the present state and future needs of SAC and SRC information usage at the case company as well as the functions of the company were examined by interviewing some members of the company personnel. With the help of these theories and methods it was aimed at finding out both the theory-based and practical factors which affect the structure of the model. During the thesis study it was confirmed that the existing SAC and SRC model of the case company should be used as the basis in developing the activity-based model. As a result the indirect costs of the old model were transformed into activities and the direct costs were continued to be allocated directly to acquisition of new subscriptions and retention of old subscriptions. The refined model will enable managing the subscription acquisition, retention and the related costs better through the activity information. During the interviews it was found out that the SAC and SRC information is also used in performance measurement and operational and strategic planning. SAC and SRC are not fully absorbed costs and it was concluded that the model serves best as a source of indicative cost information. This thesis does not include calculating costs. Instead, the refined model together with both the theory-based and interview findings concerning the utilization of the information produced by the model will serve as a framework for the possible future development aiming at completing the model.

The Usage of Microsoft Push Notification Service on Mobile Devices

Along with the increasing in demand of mobile computing, Push Notification (PN) is widely used in mobile phones and other devices. PN allows the developer to send messages to the end users even when the client application is not running at the moment. This solves the problem produced by non-supported multi-tasking feature as well as saving battery life. Microsoft Push Notification Service (MPNS) is one solution to use PNs in Windows Phones. The thesis gives the developers an idea of how to use PNs by introducing MPNS, comparing MPNS with other Push Notification Services, usage of different PN types analysis, and PN simulation system implementation.

Customer relationship management through life cycle analysis, case professional service firm in B2B market

The objective of this master’s thesis was to study how customer relationships should be assessed and categorized in order to support customer relationship management (CRM) in the context of business-to-business (B2B) and professional services. This sophisticated and complex market is utilizing possibilities of CRM only rarely and even then the focus is often on technology. The theoretical part considered first CRM from the value chain point of view and then discussed the cyclical nature of relationships. The case study focused on B2B professional service firm. The data was collected from company databases and included the sample of 90 customers. The research was conducted in three phases first studying the age, then the service type of relationships and finally executing the cluster analysis. The data was analysed by statistical analysis program SAS Enterprise Guide. The results indicate that there are great differences between developments of customer relationships. While some relationships are dynamically growing and changing, most of customers are remaining constant. This implies expectations and requirements of customers are similarly divergent and relationships should be managed accordingly.

Leadership in the mobile smartphone market

The mobile telecommunications industry has been going through an enormous revolution, especially after mid-1990 when smartphones were introduced to the market. As a consequence, the smartphone market’s dynamism is requesting companies to operate differently in the way they do business. After a long period occupying the leader position in the smartphones manufacturers’ rank, Nokia was outperformed by Apple and Samsung during 2011 and since then has been on the third place. Nevertheless, Nokia is battling for regaining the leadership in such a competitive and high-velocity growing market and that is what this research is about. This research covers the competitive and strategic forces that shape dynamic industries whereas the main purpose is to elucidate the main factors that contribute to a company’s above-average performance and ultimately determine its leadership in the mobile smartphone market. Therefore, this exploratory qualitative research was conducted as a desk research, which utilized various secondary sources of data in the knowledge area of strategic management such as theories about competitive advantages and dynamic capabilities of firms, innovation, and strategy. This research is enriched with a case study about Nokia: how the company has been organizing its corporate structure to support the strategies and hence how it has been competing in the smartphone market is analyzed, taking into account many contemporary data sources, including market analysts’ and business experts’ opinions. As a result of the classic literature exploration and the case study assay, a framework for deeper analysis of the competitiveness of firms in dynamic markets was developed. The conclusion that emerged from this research is that the success of a firm results from the interplay of various factors. To regain the leader position in the mobile smartphone market is a challenging task that requires Nokia to reinvent its core strategy for taking charge of the smartphones’ industry transformation through for example the adoption of the open innovation concept. It is imperative that Nokia designs and implement a breakthrough strategy as well as embraces the uncertainty of the smartphone market competition as an opportunity for discontinuous innovation development with the ultimate goal of recovering the leadership.