Customer asset management in action: using customers portfolio for allocating resources across business-to-business relationships for improved shareholder value

Suvi Nenonen Customer asset management in action: using customer portfolios for allocating resources across business-to-business relationships for improved shareholder value Customers are crucial assets to all firms as customers are the ultimate source of all cash flows. Regardless this financial importance of customer relationships, for decades there has been a lack of suitable frameworks explaining how customer relationships contribute to the firm financial performance and how this contribution can be actively managed. In order to facilitate a better understanding of the customer asset, contemporary marketing has investigated the use of financial theories and asset management practices in the customer relationship context. Building on this, marketing academics have promoted the customer lifetime value concept as a solution for valuating and managing customer relationships for optimal financial outcomes. However, the empirical investigation of customer asset management lags behind the conceptual development steps taken. Additionally, the practitioners have not embraced the use of customer lifetime value in guiding managerial decisions - especially in the business-to-business context. The thesis points out that there are fundamental differences between customer relationships and investment instruments as investment targets, effectively eliminating the possibility to use financial theories in a customer relationships context or to optimize the customer base as a single investment portfolio. As an alternative, the thesis proposes the use of customer portfolio approach for allocating resources across the customer base for improved shareholder value. In the customer portfolio approach, the customer base of a firm is divided into multiple portfolios based on customer relationships’ potential to contribute to the shareholder value creation. After this, customer management concepts are tailored to each customer portfolio, designed to improve the shareholder value in their own respect. Therefore, effective customer asset management with the customer portfolio approach necessitates that firms are able to manage multiple parallel customer management concepts, or business models, simultaneously. The thesis is one of the first empirical studies on customer asset management, bringing empirical evidence from multiple business-to-business case studies on how customer portfolio models can be formed, how customer portfolios can be managed, and how customer asset management has contributed to the firm financial performance.

Customer asset management in action: using customers portfolio for allocating resources across business-to-business relationships for improved shareholder value

Suvi Nenonen Customer asset management in action: using customer portfolios for allocating resources across business-to-business relationships for improved shareholder value Customers are crucial assets to all firms as customers are the ultimate source of all cash flows. Regardless this financial importance of customer relationships, for decades there has been a lack of suitable frameworks explaining how customer relationships contribute to the firm financial performance and how this contribution can be actively managed. In order to facilitate a better understanding of the customer asset, contemporary marketing has investigated the use of financial theories and asset management practices in the customer relationship context. Building on this, marketing academics have promoted the customer lifetime value concept as a solution for valuating and managing customer relationships for optimal financial outcomes. However, the empirical investigation of customer asset management lags behind the conceptual development steps taken. Additionally, the practitioners have not embraced the use of customer lifetime value in guiding managerial decisions - especially in the business-to-business context. The thesis points out that there are fundamental differences between customer relationships and investment instruments as investment targets, effectively eliminating the possibility to use financial theories in a customer relationships context or to optimize the customer base as a single investment portfolio. As an alternative, the thesis proposes the use of customer portfolio approach for allocating resources across the customer base for improved shareholder value. In the customer portfolio approach, the customer base of a firm is divided into multiple portfolios based on customer relationships’ potential to contribute to the shareholder value creation. After this, customer management concepts are tailored to each customer portfolio, designed to improve the shareholder value in their own respect. Therefore, effective customer asset management with the customer portfolio approach necessitates that firms are able to manage multiple parallel customer management concepts, or business models, simultaneously. The thesis is one of the first empirical studies on customer asset management, bringing empirical evidence from multiple business-to-business case studies on how customer portfolio models can be formed, how customer portfolios can be managed, and how customer asset management has contributed to the firm financial performance.

Do Analysts Leak Information to Preferred Customers?

Inspired by the recent debate in the financial press, we set out to investigate if financial analysts warn their preferred customers of possible earnings forecast revisions. The issue is explored by monitoring investors’ trading behavior during the weeks prior to analyst earnings forecast revisions, using the unique official stock transactions data set from Finland. In summary, we do not find evidence of large investors systematically being warned of earnings forecast revisions. However, the results indicate that the very largest investors show trading behavior partly consistent with being informed of future earnings forecast revisions.

Learning dynamic prices in multiseller electronic retail markets with price sensitive customers, stochastic demands, and inventory replenishments

In this paper, we use reinforcement learning (RL) as a tool to study price dynamics in an electronic retail market consisting of two competing sellers, and price sensitive and lead time sensitive customers. Sellers, offering identical products, compete on price to satisfy stochastically arriving demands (customers), and follow standard inventory control and replenishment policies to manage their inventories. In such a generalized setting, RL techniques have not previously been applied. We consider two representative cases: 1) no information case, were none of the sellers has any information about customer queue levels, inventory levels, or prices at the competitors; and 2) partial information case, where every seller has information about the customer queue levels and inventory levels of the competitors. Sellers employ automated pricing agents, or pricebots, which use RL-based pricing algorithms to reset the prices at random intervals based on factors such as number of back orders, inventory levels, and replenishment lead times, with the objective of maximizing discounted cumulative profit. In the no information case, we show that a seller who uses Q-learning outperforms a seller who uses derivative following (DF). In the partial information case, we model the problem as a Markovian game and use actor-critic based RL to learn dynamic prices. We believe our approach to solving these problems is a new and promising way of setting dynamic prices in multiseller environments with stochastic demands, price sensitive customers, and inventory replenishments.

Late-industrial sawmill customers.

The methods of secondary wood processing are assumed to evolve over time and to affect the requirements set for the wood material and its suppliers. The study aimed at analysing the industrial operating modes applied by joinery and furniture manufacturers as sawnwood users. Industrial operating mode was defined as a pattern of important decisions and actions taken by a company which describes the company's level of adjustment in the late-industrial transition. A non-probabilistic sample of 127 companies was interviewed, including companies from Denmark, Germany, the Netherlands, and Finland. Fifty-two of the firms were furniture manufacturers and the other 75 were producing windows and doors. Variables related to business philosophy, production operations, and supplier choice criteria were measured and used as a basis for a customer typology; variables related to wood usage and perceived sawmill performance were measured to be used to profile the customer types. Factor analysis was used to determine the latent dimensions of industrial operating mode. Canonical correlations analysis was applied in developing the final base for classifying the observations. Non-hierarchical cluster analysis was employed to build a five-group typology of secondary wood processing firms; these ranged from traditional mass producers to late-industrial flexible manufacturers. There is a clear connection between the amount of late-industrial elements in a company and the share of special and customised sawnwood it uses. Those joinery or furniture manufacturers that are more late-industrial also are likely to use more component-type wood material and to appreciate customer-oriented technical precision. The results show that the change is towards the use of late-industrial sawnwood materials and late-industrial supplier relationships.

The inactive X chromosome in the human female is enriched in 5-methylcytosine to an unusual degree and appears to contain more of this modified nucleotide than the remainder of the genome

By employing a procedure that combines ELISA and photoacoustic spectroscopy, we have examined the content of 5-methylcytosine (m(5)C) in DNA of individuals who differed from one another in the number of X chromosomes in their genomes. The results show that the human inactive X chromosome (Xi) contains very high amounts of this modified nucleotide. We estimate that in the 46,XX female there is more m(5)C in Xi (similar to3.6 x 10(7)) than in all the remaining chromosomes put together (similar to2.1 x 10(7)). Our results also suggest that nearly one-fifth of all cytosines in Xi are methylated and that, in addition to CpG methylation, there is extensive non-CpG methylation as well.

A Gaussian network model study suggests that structural fluctuations are higher for inactive states than active states of protein kinases

We performed Gaussian network model based normal mode analysis of 3-dimensional structures of multiple active and inactive forms of protein kinases. In 14 different kinases, a more number of residues (1095) show higher structural fluctuations in inactive states than those in active states (525), suggesting that, in general, mobility of inactive states is higher than active states. This statistically significant difference is consistent with higher crystallographic B-factors and conformational energies for inactive than active states, suggesting lower stability of inactive forms. Only a small number of inactive conformations with the DFG motif in the ``in'' state were found to have fluctuation magnitudes comparable to the active conformation. Therefore our study reports for the first time, intrinsic higher structural fluctuation for almost all inactive conformations compared to the active forms. Regions with higher fluctuations in the inactive states are often localized to the aC-helix, aG-helix and activation loop which are involved in the regulation and/or in structural transitions between active and inactive states. Further analysis of 476 kinase structures involved in interactions with another domain/protein showed that many of the regions with higher inactive-state fluctuation correspond to contact interfaces. We also performed extensive GNM analysis of (i) insulin receptor kinase bound to another protein and (ii) holo and apo forms of active and inactive conformations followed by multi-factor analysis of variance. We conclude that binding of small molecules or other domains/proteins reduce the extent of fluctuation irrespective of active or inactive forms. Finally, we show that the perceived fluctuations serve as a useful input to predict the functional state of a kinase.

A unique group of inactive serine protease homologues from snake venom

A number of inactive serine protease homologues (SPHs), which have poorly understood functions, have been identified in invertebrates and vertebrates. Recently, several SPH transcripts have been reported from snake venom glands, which provide potential ne

Inactive and mutagenic effects induced by carbon beams of different LET values in a red yeast strain

To evaluate biological action of microorganism exposed to charged particles during the long distance space exploration. Induction of inactivation and mutation in a red yeast strain Rhodotorula glutinis AY 91015 by carbon beams of different LET values (14.9-120 0 keV mu m(-1)) was investigated It was found that survival curves were exponential, and mutation curves were linear for all LET values The dependence of inactivation cross section on LET approached saturation near 120 0 keV mu m(-1) The imitation cross section saturated when LET was higher than 582 keV mu m(-1) Meanwhile, the highest RBEI for inactivation located at 120 0 key mu m(-1) and the highest RBEm for mutation was at 58.2 key mu m(-1) The experiments imply that the most efficient mutagenic part of the depth dose profile of carbon ion is at the plateau region with intermediate LET value in which energy deposited is high enough to Induce mutagenic lesions but too low to induce over kill effect in the yeast cells (C) 2010 Elsevier B V All rights reserved

The impact of interconnectedness in a triadic relationship between a financial services provider, IFAs, and customers.

The aim of this study is to investigate the impact of interconnectedness between a long-term savings and investments provider, Independent Financial Advisers (IFAs) and customers. Ritter’s (2000) framework of the effect of interconnectedness was used to analyse this triadic relationship. Conceptual studies of triadic business relationships are scarce in marketing and organisational research (Blakenburg & Johanson, 1992; Havila, Johnson & Thilenius, 2004; Ritter, 2000). However, the applicability of a triadic relationship has been tested in a number of case studies (Andersson & Mattsson, 2004; Cunningham & Pyatt, 1989; Jaaskelainen, Kuivalainen & Saarenketo, 2000; Narayandas, 2002; Odorici & Corrado, 2004; Pardo & Salle, 1994; Trimachi, 2002). This study was conducted in collaboration with one of the UK’s largest long-term savings and investments providers. A substantial proportion of the provider’s business is conducted through IFAs and thus their significance as a major stakeholder. Indeed, the majority of sales in the long-term savings and investments industry in the UK are realised through IFAs. Academic studies (Gough, 2005; Gough & Nurullah, 2009) have indicated that IFAs are the strongest distribution channel in the industry. Thus, by analysing the impact of the interconnectedness in this relationship, a strategy that can increase the relationship performance can be proposed. However, to the best of the authors’ knowledge, a study that investigates the effect of the interconnectedness in this triadic relationship has not been established. In addition, the regulatory environment which continues to face change such as the recent implementation of Retail Distribution Review (RDR) on 1st January 2013 will make the relationship more rather than less complex.

Customers' responses to retail brand extensions

Alexander, N.; and Colgate, N. (2005). Customers' responses to retail brand extensions. Journal of Marketing Management. 21(3-4), pp.393-419 RAE2008

The role of the supply chain in developing a 'lagging' region's manufacturing industry. How important are links with suppliers and customers?

This paper investigates the use of supply chains as a source of knowledge transfer to manufacturing businesses in South Yorkshire and the effect this can have on improving economic performance. It also looks at where assistance originates from, what factors influence who gets the assistance, and what the benefits are.