Tor Andreassen - Academia.edu (original) (raw)

Papers by Tor Andreassen

ABSTRACT "Satisfaction guaranteed or your money back" is a business promise mad... more ABSTRACT "Satisfaction guaranteed or your money back" is a business promise made to consumers since 1875, when Montgomery Ward used it to differentiate his mail order catalog. It is now a vow many businesses make. However, the correlation between increasing customer satisfaction and increasing customer spending with your company is very weak, according to the authors. Their research finds that changes in customers' satisfaction levels explain less than 1% of variation in a company's share of category spending. Is customer satisfaction worth the cost? To find out, the authors investigated the relationship between customer satisfaction and business outcomes, gathering data from more than 100,000 consumers covering more than 300 brands. Although high customer satisfaction ratings are typically treated by managers as being universally good for business, the authors' findings indicate that the benefits are not nearly so clear-cut. There is a downside to continuously devoting resources to raise customer satisfaction levels. Managers are rarely able to accurately quantify the cost associated with increasing customer satisfaction scores (for example, from 8.7 to 9.1 on a 10-point scale), nor are they able to determine precisely what such an increase is actually worth. It turns out the return on these investments is often trivial or even negative. Knowing a customer's satisfaction level tells you little about how he or she will divide his or her spending among the different brands used. As a result, changes in customer satisfaction levels are unlikely to have a meaningful impact on the share of category spending customers allocate with your brand. Why? Single-brand loyalty, which was common in our parents' and grandparents' generations, has been replaced with loyalty to multiple brands in a category in many sectors. Because of this divided loyalty, more customers partially defect (in other words, they give more of their business to a competitor) than completely defect from a business or brand. As a result, improving customers' share of spending with your brand tends to represent a far greater opportunity than efforts to improve customer retention. The measure that really matters, according to the authors, isn't your percentage of delighted customers or promoters. What matters is the relative "rank" that your brand's satisfaction level represents vis-avis your competitors.

Managing Service Quality: An International Journal, 2013

Purpose - The purpose of this research is to examine different customer satisfaction and loyalty ... more Purpose - The purpose of this research is to examine different customer satisfaction and loyalty metrics and test their relationship to customer retention, recommendation and share of wallet using micro (customer) level data. Design/methodology/approach - The data for this study come from a two-year longitudinal Internet panel of over 8,000 US customers of firms in one of three industries (retail

Marketing Science

Managers commonly use customer feedback data to set goals and monitor performance on metrics such... more Managers commonly use customer feedback data to set goals and monitor performance on metrics such as “Top 2 Box” customer satisfaction scores and “intention-to-repurchase” loyalty scores. However, analysts have advocated a number of different customer feedback metrics including average customer satisfaction scores and the number of “net promoters” among a firm's customers. We empirically examine which commonly used and widely advocated customer feedback metrics are most valuable in predicting future business performance. Using American Customer Satisfaction Index data, we assess the linkages between six different satisfaction and loyalty metrics and COMPUSTAT and CRSP data-based measures of different dimensions of firms' business performance over the period 1994–2000. Our results indicate that average satisfaction scores have the greatest value in predicting future business performance and that Top 2 Box satisfaction scores also have good predictive value. We also find that ...

Journal of Service Theory and Practice

The fact that nine out of ten innovations flop in the market place serves as a backdrop to the fu... more The fact that nine out of ten innovations flop in the market place serves as a backdrop to the fundamental research question: How can firms better align their innovations with future consumer needs? The goal is to improve the probability of commercial success. By employing trend spotting as a technique, the authors isolate eight deep consumer trends with implications for service innovation: Always on the go, Always logged on, Return on time, Quality data faster, Nowism, Look-at-me-now, Privacy, and Sustainability. To provide further insights into these trends, the authors label three customer segments as a function of life cycle for which the trends will have different meanings: Young free and simple, Chaos in my life, and Got my life back. The authors elaborate on the trend Return on Time (RoT) and how a goal oriented behavior targeted at saving, buying, and spending time over a set of chosen activities with the purpose of increasing subjective well-being, impacts innovations. Fina...

Building on theory from consumer behavior this paper investigates the impact customer service may... more Building on theory from consumer behavior this paper investigates the impact customer service may have on customer satisfaction, relative attrac tiveness, and commitment (affective and calculative). The findings indicate that independent of level of customer service its impact on all constructs is significant. Interestingly, customers who report a low score on customer service have the strongest correlations but lowest construct scores and vice versa for customers reporting high customer service scores. Whereas customers who report a high score in customer service have a stronger affective commitment, customers who report a low score have a more bal anced commitment. The latter indicates that these customers are more likely to switch. For managers these findings imply that customer service is a key driver of consumers' behavioral intentions. It is a revenue generating activity. Following this, custom er service is an area in which managers should invest rather than cutting when...

Managing Service Quality, 2009

Managing Service Quality, 2008

Purpose – The study is motivated by business&amp;amp;amp;amp;amp;amp;amp;#39; mixed respo... more Purpose – The study is motivated by business&amp;amp;amp;amp;amp;amp;amp;#39; mixed response to increasing demand for customer service, leaving the question as to its impact on performance open. The study is concerned with the impact of customers&amp;amp;amp;amp;amp;amp;amp;#39; perception of customer service (bad/good) on variables that are known to drive revenue, i.e. customer satisfaction, perceived relative attractiveness, and commitment. Design/methodology/approach – Data were

Managing Service Quality, 2006

Managing Service Quality, 2007

Journal of Service Research, 2005

Journal of Service Research, 1998

Journal of Service Research, 1999

Abstract Research pertaining to return on quality is primarily based,on the disconfirmation of ex... more Abstract Research pertaining to return on quality is primarily based,on the disconfirmation of expectation paradigm,usingpast experience,as the key predictor of future intent. This paper uses perceived relative attractiveness today and tomorrow,as predictors of intent. Based on the theoretical model and data sampled we report three findings. First, perceived relative attractiveness today is the key driver of future intent in both

Journal of Service Management, 2010

International Journal of Service Industry Management, 2007