Unlocking the power of marketing: understanding the links between customer mindset metrics, behavior, and profitability

Petersen, J A and Kumar, V and Polo, Y and Sese, F J (2017) Unlocking the power of marketing: understanding the links between customer mindset metrics, behavior, and profitability. Journal of the Academy of Marketing Science.

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Abstract

Recent evidence about the central role played by perceptual constructs in driving performance outcomes has produced a renewed interest in studying customer mindset metrics (CMMs; e.g., satisfaction, service quality, and loyalty intentions). However, we still lack a proper understanding of how (i.e., process) and to what extent (i.e., magnitude) these CMMs ultimately translate into profitability at the customer level. In this study, we integrate CMMs into an individual-level framework of customer behavior and profitability and provide a conceptual understanding of the process through which these metrics influence customer profitability. Specifically, we propose three mechanisms through which CMMs affect customer behavior and profitability: behavioral effect, marketing effectiveness effect, and marketing efficiency effect. We empirically test this framework across two distinct contexts, a B2B high-tech firm and a B2C telecommunications firm. The results demonstrate that these unobservable CMMs have a significant and multi-dimensional impact on customer behavior and customer profitability. Furthermore, we compute the increases in customer behavior and customer profitability that each firm can expect due to increases in CMMs to help firms improve resource allocation and make better decisions about how much (and when) to invest in CMMs.

Affiliation: Indian School of Business
ISB Creators:
ISB CreatorsORCiD
Kumar, VUNSPECIFIED
Item Type: Article
Uncontrolled Keywords: Customer mindset metrics, Satisfaction, Service quality, Loyalty intentions, Customer behavior, Customer profitability
Subjects: Business and Management
Marketing
Depositing User: Veeramani R
Date Deposited: 03 Aug 2017 21:29
Last Modified: 03 Aug 2017 21:29
URI: http://eprints.exchange.isb.edu/id/eprint/540
Publisher URL: https://doi.org/10.1007/s11747-017-0554-5
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