[Truncated abstract] Relationship marketing and some of its associated strategies, including customer relationship management (CRM), is an approach to marketing that is increasingly recognised as important by researchers and marketers. The approach suggests that marketers should focus on developing and maintaining strong relationships with existing customers in order to increase customer lifetime value (CLV) and to reduce the costs associated with constantly acquiring new customers. Advocates promote increased revenue per customer, increased products per customer (customer share), lower customer churn (higher retention) and increased chance that loyal customers will advocate on behalf of the organisation (positive word of mouth), as just some of the benefits of building relationships. While the concept of developing stronger relationships with customers appears convincing; the successful implementation of relationship marketing & CRM initiatives has been a challenge for many enterprises. There are many reasons cited for this including differing benchmarks for success, the range of relationship marketing activities available to marketers, customer differences and how marketers choose to model customer response. To cut through this complexity and to contribute to the field, the current study was carried out to explore, in detail, a single relationship marketing initiative being implemented in a large consumer oriented organisation. The goals of the current study were to see whether the introduction of a cross-selling initiative (CSI) helped front line employees to cross-sell additional products to existing customers during face-to-face interactions and whether the technique used to predict product adoption influenced the effectiveness of those cross-selling activities. Cross-selling refers to the promotion of additional products to existing customers. .... It was considered likely that retail employees would be more confident if they received a specific cross-selling recommendation for a customer and that the increased confidence would lead to increased cross-selling activity and better results. The results confirmed that: Retail employees were more likely to approach a customer with a cross-sell offer if they had a specific recommendation for that customer. Cross-sell offers based upon those recommendations were more likely to be successful. Logistic regression was a better technique for identifying customers likely to adopt the product than anecdotal modelling approaches. The current study makes an important contribution to marketers considering or engaging in customer relationship marketing by confirming the effectiveness of CSIs. Based upon the results, CSIs appear to offer marketers an effective tool to increase customer share thereby increasing revenue and potentially increasing customer loyalty, tenure and profitability. The study also illustrates that effective modeling reduces the chance of making superfluous cross-selling offers to customers thereby reducing the cost of cross-selling, enhancing the confidence of retail employees and minimising the risk of damaging existing relationships. Overall, the study illustrates that the potential for CSIs as a relationship marketing tool is substantial and should not be underestimated.
| Identifer | oai:union.ndltd.org:ADTP/258982 |
| Date | January 2009 |
| Creators | Ferguson, Graham |
| Publisher | UWA Business School, University of Western Australia. Faculty of Economics and Commerce |
| Source Sets | Australiasian Digital Theses Program |
| Language | English |
| Detected Language | English |
| Rights | Copyright Graham Ferguson, http://www.itpo.uwa.edu.au/UWA-Computer-And-Software-Use-Regulations.html |
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