Skip to main content
All Posts By

C-CUBES™

C-CUBES™
In Research Articles

Customer Satisfaction and Price Tolerance

EUGENE W. ANDERSON

This study investigates the association between customer satisfaction and willingness-to-pay or price tolerance. The goal is not only to determine whether the association between customer satisfaction and price tolerance is positive or negative but also to gauge the degree of association. The Swedish Customer Satisfaction Barometer provides the data. The empirical analysis indicates a negative association between the level of customer satisfaction provided by the firm and the degree of price tolerance exhibited by its customers. However, a positive association is found between year-to-year changes in the levels of customer satisfaction and price tolerance.

READ MORE

Read More
C-CUBES™
In Research Articles

Relating Online, Regional, and National Advertising to Firm Value

SHRIHARI SRIDHAR, FRANK GERMANN, CHARLES KANG AND RAJDEEP GREWAL

Firms spend billions of dollars on advertising every year but remain uncertain about allocation across various advertising vehicles. Allocation decisions are even more complex as online advertising has proliferated and consumers’ media usage patterns have become more fragmented. To determine advertising effectiveness, the authors group firms’ advertising vehicle choices into three theoretically grounded and empirically verified smaller subsets: national, regional, and online advertising. Subsequently, they assess how the three advertising vehicles independently and jointly affect firm performance. Using 12 years of data covering 662 manufacturing firms, the authors find that while national, regional, and online advertising each have a positive and significant main effect on firm performance, each advertising vehicle weakens the effectiveness of the respective other two advertising vehicles (e.g., a 1% increase in online advertising increases firm performance by .32% but also decreases national [.15%] and regional [.03%] advertising effectiveness). A battery of robustness checks triangulates this result. Although all three media vehicles contribute to net increases in performance, the authors discuss the need to strategically integrate them to maximize combined effectiveness.

READ MORE

Read More
C-CUBES™
In B2B: Research Articles, Education: Research Articles, Energy: Research Articles, Research Articles, Retail: Research Articles

Customer-Centric Org Charts Aren’t Right for Every Company

JU-YEON LEE, SHRIHARI SRIDHAR AND ROBERT W. PALMATIER

The new conventional wisdom on corporate structure is that companies can do better by organizing themselves around customer groups. The logic sounds compelling: A customer-centric structure, as the approach is known, can help a company understand its customers better, develop deeper relationships with them, and improve customer satisfaction. Some 30% of Fortune 500 firms, including Intel, Dell, IBM, and American Express, are already on board, and the numbers are growing all the time.

READ MORE

Read More
C-CUBES™
In Research Articles

The Satisfaction Profit Chain

CARLY FRENNEA, VIKAS MITTAL AND ROBERT A.WESTBROOK

The Satisfaction Profit Chain (SPC) is a theoretical framework that helps link attribute-level perceptions, overall customer satisfaction, customer intentions/behaviors, and financial outcomes. This chapter reviews existing empirical research in this area and provides guidance and recommendations for future research. It is intended to be helpful to managers and academics who are interested in understanding how customer satisfaction — a focal construct — is embedded in the context of its antecedents and consequences.

READ MORE

Read More
C-CUBES™
In B2B: Research Articles, Education: Research Articles, Energy: Research Articles, Research Articles, Retail: Research Articles

Customer Satisfaction: A Strategic Review and Guidelines for Managers

VIKAS MITTAL AND CARLY FRENNEA

Superior customer satisfaction provides a clear strategic advantage and an inimitable resource for a firm—particularly in today’s complex and often uncertain markets. Two decades of academic research has quantified the impact of customer satisfaction on a number of beneficial customer behaviors and consequent financial performance. It is clear that firms that manage their customers as well as costs realize greater financial returns compared to firms who ignore customer satisfaction.

READ MORE

Read More
C-CUBES™
In CubeSense

Data Suggests Customer Satisfaction the Only Road Back for Staples

VIKAS MITTAL, SHRIHARI SRIDHAR AND TRANG DUONG

Even as Staples announced the closure of 70 stores on March 9 – those on the heels of 48 store closures in 2016 and 242 in previous years – CEO Shira Goodman said she had reason for optimism. “I am particularly proud of our ability to grow our delivery business by continuing to enhance our offering and satisfy our business customers,” she said in a meeting with investors.

Read More
C-CUBES™
In B2B: Briefs, Briefs, Energy: Briefs

Power-Up PPI

COLLABORATIVE FOR CUBES™ BREAKS DOWN PRICE ELASTICITY.

To remain profitable, companies must have pricing power. They must have the ability to raise prices while maintaining relatively stable unit sales. And at the 100,000-foot level, where CEOs are looking to examine the financial outcomes of their actions, B2B companies struggle to increase pricing power.

The concept of pricing power is associated with price elasticity, or price sensitivity. The more price-sensitive a consumer, the more negatively the consumer will react to an increase. Companies with higher relative pricing power find customers react less negatively to a price increase. Thus, they are able to maintain stable unit sales when they enact an increase.

DOWNLOAD THIS BRIEF

Read More
C-CUBES™
In B2B: Briefs, Briefs, Energy: Briefs

Multiplier Customers

COLLABORATIVE FOR CUBES™ HELPS TARGET PROFITABLE NEW CLIENTS.

All customers are not the same. Some generate only one-time business. Others can help grow a firm organically through repur- chasing, recommending the business to peers, inviting bids on new business, and offering positive word-of mouth. Customers who engage in these behaviors are “multiplier customers”: they help firms multiply their business growth.

Multiplier customers who offer peer recommendations and repeat business are especially critical for industrial business-to-business (B2B) companies that offer specialized products and solutions to meet complex customer needs and for whom the cost of customer acquisition can be high. Without multiplier customers, B2B companies see increased customer acquisition costs, may have lower sales per customer, and fail to deliver the desired financial results.

DOWNLOAD THIS BRIEF

Read More
C-CUBES™
In B2B: Briefs, Briefs, Energy: Briefs

The EBITDA Conundrum

COLLABORATIVE FOR CUBES™ RESEARCH OFFERS WAY OUT.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a powerful metric used to evaluate the profitability of a business. Because of its nuanced approach to earnings, it is a different metric from cash flow.

At the 100,000-foot level, many boards and CEOs of business-to- business (B2B) companies rely on EBITDA as the key to evaluat- ing the current and near-term health of their companies. Efforts to manage EBITDA typically focus on production factors that fall within the realm of finance and operations. Indeed, managing a firm’s operational expenditures is seen as key to managing EBITDA.

While managing EBITDA via operating expenses can be effective, the focus of such an approach is strictly inward-looking. Over time, the focus becomes cost cutting, efficiency, and lean production. Research shows companies focusing on efficiency succeed at delivering higher long-term value to shareholders, but surprisingly, a 2005 study showed companies that combine an efficiency focus with a customer focus deliver even higher long-term value to shareholders — up to 1.5 times higher.

DOWNLOAD THIS BRIEF

Read More