Customer engagement value: process, limitations and future research

Second Author's Department

Management Department

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https://doi.org/10.1108/JM2-12-2020-0319

Document Type

Research Article

Publication Title

Journal of Modelling in Management

Publication Date

1-1-2021

doi

10.1108/JM2-12-2020-0319

Abstract

Purpose: The purpose of this paper is to close the gap between the theoretical nature of existing contributions in customer engagement value (CEV) and its need to practically empower business decisions. This is done by proposing a framework that consists of three techniques, each of which combines the components of CEV to make it more comprehensive and applicable. The paper also reviews and analyzes the work that has been done so far in the area of CEV whether in business to business (B2B), business to consumer (B2C) or consumer to consumer (C2C) markets. Design/methodology/approach: CEV is a comprehensive term that measures the total value of the customer through capturing his transactional and non-transactional behaviors. Hence, it is an essential term for measuring the value of the customer in direct marketing. This motivates researchers to compete in developing models to maximize CEV. Meanwhile, most of the existing models are conceptual and the majority of them lack applicability due to many reasons. First, these models relied on a linear version of the CEV model, hence double-counting the value of the customer; also they weighted the components of CEV equally, which is unrealistic. Finally, the effect of the environmental components in determining the engagement level of each customer was almost ignored. In this paper, two main contributions are presented. First, a summary and analysis of the contributions of the literature in the CEV field for different market types whether in B2C, B2B or C2C. Furthermore, three modifications are added to the existing models. The first model introduces a non-linear relationship of the components of CEV. The second model is a weighted linear model of these components. Finally, the third model adds the environmental factors to the CEV components. All the proposed models are theoretical in nature, however, these models are expected to show superiority when being applied to real data sets due to their ability to capture the complexity in the relationship between the firm and its customers in real-life situations. The proposed models are expected to attract the practitioners and other researchers and they both are encouraged to apply the proposed models on real-life data sets, test their performance, compare them against each other, to be able to apply each of them on the best suitable data set and business scenario. Findings: Based on the review and analysis that has been done on about 87 papers, it is found that the majority of the contributions that have been done in the area of CEV are theoretical in nature, in spite of the effectiveness of CEV in empowering business decision. It is also found that few researchers proposed a set of theoretical comprehensive frameworks that combined CEV’s components together. Meanwhile, those frameworks are not practically applicable. Research limitations/implications: Although the contribution of the proposed models expected to attract both researchers and practitioners, these are not applied to real-life case studies to prove their effectiveness. Practical implications: The research in this paper has many industrial and managerial implications. First, it helps managers and decision takers to treat the customers as assets and cost-free resources who can work with the firm to achieve what’s both aims to (i.e. increase customer satisfaction and firm’s profitability). Second, it helps the firm to determine the total value of each customer and treat its customers accordingly. Third, it empowers the managers to do target marketing, based on grouping the customers upon their total engagement. This would save time and cost and for sure increase the profitability and customer satisfaction. Forth, the proposed models take into consideration not only the transactional behavior of the customers but also the non-transactional factors that play a significant role in formulating the relationship between the firm and its customers. Originality/value: This is hereby to certify that the paper is original, neither the paper nor a part of it is under consideration for publication anywhere else. Also, this study has no conflicts of interest to disclose.

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