Lost and win-back customers: towards a theoretical framework of customer relationship reactivation
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abstract
Research has shown that there is a negative correlation between the number of "lost customers" and business income. Stauss and Friege (1999) have
found that the net return on investment from a new customer is 23% compared to a 214% return on investment from the reinstatement of a customer
who has defected. Customer win-back is an important part of a customer relationship management strategy and focuses on the re-initiation and
management of relationships with customers that have lapsed or defected from a firm (Thomas, Blattberg, and Fox, 2004). This study presents an
ongoing doctoral research and is mainly conceptual in nature. It develops a theoretical framework of Customer Relationship Reactivation in B2C services
and is interested in a dual analysis relating relationship dissolution and reactivation in B2C services. The research questions are:
•Why do some ended relationships reactivate?
• How does the process of reactivation develop in B2C services?
The aim of this study is to explore dynamics of customer relationships in the
posdissolution phase. The specific challenges with which companies with high levels
of churn and competitive pressure are faced are addressed. Focusing relationships
between the service provider and its individual customers, a theoretical framework
of Customer Relationship Reactivation (CRR) is proposed based on ending literature
and equity theory. A mixed methodology is used with an exploratory firms survey, a
case study and in depth interviews. We believe it is possible to apply the theoretical
framework in companies delivering a mix of goods and services. We describe and
illustrate the value of the framework which includes key determinants such as
customer characteristics, relationship characteristics, cognitive factors, emotional
factors, reasons for switching and reactivation barriers.
The aim of this study is to explore dynamics of customer relationships in the posdissolution
phase. The specific challenges with which companies with high levels of churn
and competitive pressure are faced are addressed. Focusing relationships between the service
provider and its individual customers, a theoretical framework of Customer Relationship
Reactivation (CRR) is proposed based on ending literature and equity theory. A mixed
methodology is used with an exploratory firms survey, a case study and in depth interviews.
We believe it is possible to apply the theoretical framework in companies delivering a mix of
goods and services. We describe and illustrate the value of the framework which includes key
determinants such as customer characteristics, relationship characteristics, cognitive factors,
emotional factors, reasons for switching and reactivation barriers.
