Recapturing Lost Customers

Jacquelyn S. Thomas, Robert C. Blattberg and Edward J. Fox
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Jacquelyn S. Thomas: Integrated Marketing Communications Department, Medill School of Journalism, USA
Robert C. Blattberg: J.L. Kellogg Graduate School of Management, Northwestern University, USA
Edward J. Fox: Edwin Cox School of Business, Southem Methodist University, USA

Chapter 15 in Perspectives on Promotion and Database Marketing:The Collected Works of Robert C Blattberg, 2010, pp 229-243 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractFor both academics and practitioners, the dominant focus of customer relationship management has been customer retention. The authors assert that customer winback should also be an important part of a customer relationship management strategy. Customer winback focuses on the reinitiation and management of relationships with customers who have lapsed or defected from a firm. In some cases, firms engage in extensive efforts to reacquire lapsed customers or defectors, and a common tactic is lowering the price to reacquire a customer. This investigation goes beyond the reacquisition pricing strategy and also examines the optimal pricing strategy when the customer has decided to reinitiate the relationship. By simultaneously modeling reacquisition and duration of the second tenure with the firm, the authors determine that the optimal pricing strategy for their application involves a low reacquisition price and higher prices when customers have been reacquired. In addition to pricing strategy, they also discuss the implications of their findings for targeting lapsed customers for reacquisition.

Keywords: Quantitative Marketing; Tracker Model; Customer Level Data; Marketing-Mix Modeling (search for similar items in EconPapers)
JEL-codes: M31 (search for similar items in EconPapers)
Date: 2010
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