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Between Death and Life : A Formal Decision Model to Decide on Customer Recovery Investments

Title data

Kleindienst, Dominikus ; Waldmann, Daniela:
Between Death and Life : A Formal Decision Model to Decide on Customer Recovery Investments.
In: Electronic Markets. (2018) . - pp. 1-13.
ISSN 1422-8890

Official URL: Volltext

Abstract in another language

As digitization supports customers in gaining increased market transparency (Desai Hastings Law Journal, 65(6), 1469–1482, 2014), migrating from one organization to another (“customer migration”) is becoming easier and more attractive. Thus, taking measures to regain customers who terminated their relationship (“customer recovery”) has become increasingly important for organizations. With the growing importance of customer recovery in present times, organizations face even more challenges pertaining to risk of making wrong investment decisions. Organizations can either mistakenly invest in customer relations that are “alive” or irretrievably “dead.” Furthermore, it has the risk of not investing in inactive customer relations that have a chance to be revived (“dying”). Consequently, it is necessary for organizations to consider the probability that a customer relation is “alive,” “dying,” or “dead” when deciding on customer recovery. Based on these probabilities, an economically reasonable decision has to be made on whether to invest in the recovery of an individual customer relationship. Accordingly, based on a comprehensive discussion of related work, we propose a formal decision model on whether to invest in customer relation recovery. To demonstrate the decision model’s applicability, an illustrative case with sample calculation is presented and expert interviews are conducted.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: customer data; customer recovery; digitization; decision model
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Research Institutions
Research Institutions > Affiliated Institutes
Research Institutions > Affiliated Institutes > Fraunhofer Project Group Business and Information Systems Engineering
Research Institutions > Affiliated Institutes > FIM Research Center Finance & Information Management
Faculties > Faculty of Law, Business and Economics
Result of work at the UBT: Yes
DDC Subjects: 000 Computer Science, information, general works > 004 Computer science
300 Social sciences > 330 Economics
Date Deposited: 03 May 2018 06:31
Last Modified: 03 May 2018 06:31