Through field experiments conducted in two business-to-business firms, the authors evaluate the financial and relational consequences of adopting a customer focus in sales campaigns. In both the experiments, salespeople adopting the customer-focused sales campaign coordinated their sales calls with the objective of selling all the products that a customer was predicted to purchase only at the time the customer was expected to purchase. The authors compare this strategy with the current practice in the organization in which salespeople for each product category independently contacted the customers who were expected to purchase in that category without any guidance on the expected timing of customer purchase. The experiments show that adopting a customer-focused sales campaign can significantly increase firm profits and return on investment. The total incremental profits obtained from implementing the customer-focused sales campaign was more than $1 million. High-revenue customers were the source of improvements in the efficiency of marketing contacts, whereas low-revenue customers were the source of improvements in the effectiveness of the marketing contacts. A customer-focused sales campaign also improved the relationship quality between the customer and the firm. This research provides empirical evidence for theoretical expectations of the benefits provided by a customer-focused sales campaign. Organizations can use the field experiments illustrated in this study as a template for implementing the first step in migrating to a customer-centric organization.

Predicting customer behavior is so difficult that companies spend millions inundating-and alienating-customers. Here's a way to crunch the data that makes it possible to offer customers what they want, when they want it.

In this research, the authors present a modeling framework for balancing resources between customer acquisition efforts and customer retention efforts. The key question that the framework addresses is, “What is the customer profitability maximizing balance?” In addition, they answer questions about how much marketing spending to allocate to customer acquisition and retention and how to distribute those allocations across communication channels.

Stable, healthy growth is built on the profitability of customers, not on their raw numbers or their loyalty. New techniques allow companies to focus their marketing dollars precisely where the profits are. Clearly, companies that focus only on customers who are easy to acquire and retain are not allocating their resources as efficiently as they might.

The authors develop a framework that incorporates projected profitability of customer in the computation of lifetime duration. Furthermore, the authors identify factors under a manager's control that explain the variation in the profitable lifetime duration. They also compare other frameworks with the traditional methods such as the recency, frequency, and monetary value and illustrate the superiority of the proposed framework. Finally, the authors develop several key implications that can be of value to decision makers in managing customer relationships.

Loyal customers cost less to serve! They pay more than other customers, and attract new customers through word-of-mouth. These loud claims prompted one high-tech service provider to launch a $2 million-per-year customer-loyalty program. Five years later, the company made distributing discoveries: Half of its loyal customers barely generated a profit. And half of its most profitable customers bought high-margin products once-then disappeared. What happened? As recent research reveals, the loyalty-equals-profitability equation is surprisingly weak-and complicated. Not all loyal customers are profitable and not all profitable customers loyal. Managing customer for loyalty doesn't automatically mean managing them for profits. To strengthen the loyalty-profitability link, you manage both-simultaneously.

Relationship marketing emphasizes the need for maintaining long-term customer relationships. It is beneficial, in genera, to serve customers over a longer time, especially in a contractual relationship. However, it is not clear whether some of the findings observed in a contractual setting hold good in noncontractual scenarios: relationships between a seller and a buyer that are no governed by a contract or membership. The authors offer four different propositions in this study and subsequently test each one in a noncontractual context. The four propositions relate to whether (1) there exists a strong positive customer-lifetime-probability relationship, (2) profits increase over time, (3) the costs of serving long-life customers are no less, and (4) long-life customer pay higher prices. The authors develop arguments both for and against each of the propositions. The data for this study, obtained from a large catalog retailer, cover a three-year window and are recorded on a daily basis. The empirical findings observed in this study challenge all the expectations derived from the literature. Long-life customers are not necessarily profitable customers. The authors develop plausible explanations for findings that go against the available evidence in the literature and identify three indicators through discriminant analysis that can help manager focus their efforts on more profitable customers. The authors draw several marketing implications and acknowledge the limitations of the study.

The authors develop a framework that incorporates projected profitability of customer in the computation of lifetime duration. Furthermore, the authors identify factors under a manager's control that explain the variation in the profitable lifetime duration. They also compare other frameworks with the traditional methods such as the recency, frequency, and monetary value and illustrate the superiority of the proposed framework. Finally, the authors develop several key implications that can be of value to decision makers in managing customer relationships.

The impact of internal reference price discrepancy (between actual price and internal reference price), and external reference price discrepancy (between actual price and external reference price) on brand choice is studied in two different contexts: whether the consumer faces a stockout condition at the time of purchase or not, and whether the consumer is a deal-prone consumer or not. Internal reference price based on the past prices paid for the brand by the consumer, and external reference price is dependent upon the prices of all brands in the category at the point of purchase. Hypotheses are tested by estimating brand choice models using IRI scanner panel data for two product categories-saltine crackers and baking chips. Results indicate that, in general, the impact of the external reference price discrepancy on brand choice is greater than that of the internal price discrepancy. However, this varies depending upon the contextual conditions. For consumers facing a stockout condition at the same of purchase, and for deal-prone consumers, the impact of the external reference price discrepancy on brand choice is greater than that of the internal reference price discrepancy. However, for consumers not facing a stockout condition, and for non-deal-prone consumers, there is no difference in the impact of the internal and external reference price discrepancy on brand choice. Also, the impact of both the external and internal reference price discrepancy on brand choice is greater for consumers not facing a stockout condition at the time of purchase relative to facing a stockout condition, and for deal-prone and non-deal-prone consumers. Implication for pricing strategies are discusses for retailers, and limitations and extensions of this study are also provided.