Online customer-initiated contacts and the development of profitable relationships

Abstract Recent advances in technology have profoundly impacted the way firms interact and transact with current and prospective customers. The emergence of online channels has been of particular relevance, as it promotes consumers’ active participation in the value-creation process. In this study, we draw from the Stimulus-Organism-Response model to provide a theoretical understanding of the role played by two critical factors driving online customer-initiated contacts (OnCICs): social effects and perceived risk. Additionally, we establish a direct link between these interactions and customer profitability. We merge longitudinal objective data with subjective data for a sample of 1990 customers in financial services and apply partial least squares, revealing that social effects influence perceived risk. Perceived risk consequently promotes the development of OnCICs, while social effects reduce the need for such interactions. Finally, OnCICs help to promote high-quality relationships and leads to higher performance. Implications for theory and management are discussed.

[1]  R. Brislin.  Cross-cultural research methods , 1973 .

[2]  E. Keller.  Unleashing the Power of Word of Mouth: Creating Brand Advocacy to Drive Growth , 2007, Journal of Advertising Research.

[3]  Peter E. Rossi,et al.  Planning to Make Unplanned Purchases? The Role of In-Store Slack in Budget Deviation , 2010 .

[4]  Mary Caravella,et al.  Adding Bricks to Clicks: Predicting the Patterns of Cross-Channel Elasticities over Time , 2011 .

[5]  S. Beatty,et al.  External Search Effort: An Investigation across Several Product Categories , 1987 .

[6]  Frances X. Frei,et al.  Cost Structure, Customer Profitability, and Retention Implications of Self-Service Distribution Channels: Evidence from Customer Behavior in an Online Banking Channel , 2010, Manag. Sci..

[7]  Mary Jo Bitner,et al.  Choosing among Alternative Service Delivery Modes: An Investigation of Customer Trial of Self-Service Technologies , 2005 .

[8]  A. Rangaswamy,et al.  The Impact of New Media on Customer Relationships , 2010 .

[9]  Jacob Cohen.  Statistical Power Analysis for the Behavioral Sciences , 1969, The SAGE Encyclopedia of Research Design.

[10]  B. Libai,et al.  Social Effects on Customer Retention , 2011 .

[11]  J. Goldenberg,et al.  The Role of Hubs in the Adoption Process , 2009 .

[12]  Paul A. Pavlou,et al.  Understanding and Mitigating Uncertainty in Online Exchange Relationships: A Principal-Agent Perspective , 2007, MIS Q..

[13]  E. Deci,et al.  Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. , 2000, The American psychologist.

[14]  Shumaila Y. Yousafzai,et al.  A proposed model of e-trust for electronic banking , 2003 .

[15]  Customer engagement: a new frontier in customer value management , 2013 .

[16]  G. Hübner,et al.  Operational risk and reputation in the financial industry , 2010 .

[17]  M. Lindell,et al.  Accounting for common method variance in cross-sectional research designs. , 2001, The Journal of applied psychology.

[18]  Jung-Kuei Hsieh,et al.  The challenge for multichannel services: Cross-channel free-riding behavior , 2011, Electron. Commer. Res. Appl..

[19]  Paul A. Pavlou,et al.  Predicting E-Services Adoption: A Perceived Risk Facets Perspective , 2002, Int. J. Hum. Comput. Stud..

[20]  Puneet Manchanda,et al.  Social Dollars: The Economic Impact of Customer Participation in a Firm-Sponsored Online Customer Community , 2015, Mark. Sci..

[21]  F. Dwyer,et al.  Developing Buyer-Seller Relationships: , 1987 .

[22]  Edward G. Carmines,et al.  Reliability and Validity Assessment , 1979 .

[23]  Wagner A. Kamakura,et al.  “Are multichannel customers really more valuable? An analysis of banking services” , 2016 .

[24]  David Godes,et al.  Using Online Conversations to Study Word-of-Mouth Communication , 2004 .

[25]  S. Forsythe,et al.  Consumer patronage and risk perceptions in Internet shopping , 2003 .

[26]  F. Bass.  A new product growth model for consumer durables , 1976 .

[27]  N. Christakis,et al.  SUPPLEMENTARY ONLINE MATERIAL FOR: The Collective Dynamics of Smoking in a Large Social Network , 2022 .

[28]  R. Emerson.  Power-Dependence Relations , 1962, Power in Modern Societies.

[29]  Yen-Liang Chen,et al.  Predicting the influence of users' posted information for eWOM advertising in social networks , 2014, Electron. Commer. Res. Appl..

[30]  R. Staelin,et al.  A Model of Perceived Risk and Intended Risk-handling Activity , 1994 .

[31]  Jyun-Cheng Wang,et al.  How online social ties and product-related risks influence purchase intentions: A Facebook experiment , 2013, Electron. Commer. Res. Appl..

[32]  R. Donovan.  Store atmosphere and purchasing behavior , 1994 .

[33]  P. Kotler.  Atmospherics as a Marketing Tool , 1974 .

[34]  P. Leeflang.  Paving the way for "distinguished marketing" , 2011 .

[35]  P. M. Podsakoff,et al.  Self-Reports in Organizational Research: Problems and Prospects , 1986 .

[36]  Shun-Yao Tseng,et al.  Perceived risk influence on dual-route information adoption processes on travel websites , 2016 .

[37]  Antoni Meseguer-Artola,et al.  Learning from customer interaction: How merchants create price-level propositions for experience goods in hybrid market environments , 2015, Comput. Hum. Behav..

[38]  Donald F. Cox,et al.  Perceived Risk and Consumer Decision-Making—The Case of Telephone Shopping , 1964 .

[39]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[40]  Maria Madlberger,et al.  The role of atmospheric cues in online impulse-buying behavior , 2013, Electron. Commer. Res. Appl..

[41]  Vanesa Barrales-Molina,et al.  Exploring the Relationship between Information Technology Competence and Quality Management , 2015 .

[42]  Anil Bilgihan,et al.  The effect of website features in online relationship marketing: A case of online hotel booking , 2015, Electron. Commer. Res. Appl..

[43]  C. Samuel Craig,et al.  Collaborative and Iterative Translation: An Alternative Approach to Back Translation , 2007 .

[44]  K. Grønhaug,et al.  Perceived Risk: Further Considerations for the Marketing Discipline , 1993 .

[45]  G. Lilien,et al.  Medical Innovation Revisited: Social Contagion versus Marketing Effort1 , 2001, American Journal of Sociology.

[46]  Sung-Byung Yang,et al.  An Odyssey into Virtual Worlds: Exploring the Impacts of Technological and Spatial Environments , 2011, MIS Q..

[47]  Joseph Pancras,et al.  Cross-buying in retailing: Drivers and consequences , 2008 .

[48]  J. Jacoby.  Stimulus-Organism-Response Reconsidered: An Evolutionary Step in Modeling (Consumer) Behavior , 2002 .

[49]  Manuel J. Sánchez-Franco,et al.  Variance-Based Structural Equation Modeling: Guidelines for Using Partial Least Squares in Information Systems Research , 2012 .

[50]  Michel Tenenhaus,et al.  PLS path modeling , 2005, Comput. Stat. Data Anal..

[51]  V. Kumar,et al.  Interaction Orientation and Firm Performance , 2008 .

[52]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[53]  E. Deci,et al.  The "What" and "Why" of Goal Pursuits: Human Needs and the Self-Determination of Behavior , 2000 .

[54]  J. Bettman.  Perceived Risk and Its Components: A Model and Empirical Test , 1973 .

[55]  Thomas W. Valente,et al.  Opinion Leadership and Social Contagion in New Product Diffusion , 2011, Mark. Sci..

[56]  Wagner A. Kamakura,et al.  Defection Detection: Measuring and Understanding the Predictive Accuracy of Customer Churn Models , 2006 .

[57]  Dylan Walker,et al.  Creating Social Contagion Through Viral Product Design: A Randomized Trial of Peer Influence in Networks , 2010, ICIS.

[58]  J. Russell,et al.  An approach to environmental psychology , 1974 .

[59]  P. Pavlou,et al.  Understanding and Mitigating Uncertainty in Online Environments: A Principal-Agent Perspective , 2006 .

[60]  Iguácel Melero,et al.  Recasting the Customer Experience in Today's Omni-channel , 2016 .

[61]  Ruth N. Bolton,et al.  Customer-to-Customer Interactions: Broadening the Scope of Word of Mouth Research , 2010 .

[62]  Carla Ruiz-Mafé,et al.  Key drivers of internet banking services use , 2009, Online Inf. Rev..

[63]  Detmar W. Straub,et al.  Common Beliefs and Reality About PLS , 2014 .

[64]  U. Dholakia.  A motivational process model of product involvement and consumer risk perception , 2001 .

[65]  Eva Ascarza,et al.  Beyond the Target Customer: Social Effects of CRM Campaigns , 2016 .

[66]  Dominique M. Hanssens,et al.  The Impact of Marketing-Induced versus Word-of-Mouth Customer Acquisition on Customer Equity Growth , 2008 .

[67]  Kirk L. Wakefield,et al.  Spending on the Fly: Mental Budgets, Promotions, and Spending Behavior: , 2010 .

[68]  G. Odekerken-Schröder,et al.  Investments in Consumer Relationships: A Cross-Country and Cross-Industry Exploration , 2001 .

[69]  S. Neslin,et al.  Key Issues in Multichannel Customer Management: Current Knowledge and Future Directions , 2009 .

[70]  Ángel Herrero Crespo,et al.  The influence of the commercial features of the Internet on the adoption of e-commerce by consumers , 2010, Electron. Commer. Res. Appl..

[71]  Graeme McLean,et al.  Evolving the online customer experience ... is there a role for online customer support? , 2015, Comput. Hum. Behav..

[72]  James A. Russell,et al.  Environmental effects on affiliation among strangers. , 1975 .

[73]  C. Ruiz-Mafé,et al.  The role of consumer innovativeness and perceived risk in online banking usage , 2009 .

[74]  V. Vieira.  Stimuli–organism-response framework: A meta-analytic review in the store environment , 2013 .

[75]  L. Krishnamurthi,et al.  On the Go: How Mobile Shopping Affects Customer Purchase Behavior , 2015 .

[76]  Thorsten Wiesel,et al.  Practice Prize Paper - Marketing's Profit Impact: Quantifying Online and Off-line Funnel Progression , 2011, Mark. Sci..

[77]  C. Camarero,et al.  How perceived risk affects online buying , 2009 .

[78]  Sandy D. Jap,et al.  Control Mechanisms and the Relationship Life Cycle: Implications for Safeguarding Specific Investments and Developing Commitment , 2000 .

[79]  V. Mahajan,et al.  Innovation diffusion and new product growth models: A critical review and research directions , 2010 .

[80]  N. Ravishanker,et al.  Multichannel Shopping: Causes and Consequences , 2007 .

[81]  Pingjun Jiang,et al.  An empirical comparison of market efficiency: Electronic marketplaces vs. traditional retail formats , 2014, Electron. Commer. Res. Appl..

[82]  Oded Netzer,et al.  Beyond the Target Customer: Social Effects of Customer Relationship Management Campaigns , 2017 .

[83]  Ankit Kesharwani,et al.  The impact of trust and perceived risk on internet banking adoption in India : An extension of technology acceptance model , 2022 .

[84]  D. Bowman,et al.  Managing Customer-Initiated Contacts with Manufacturers: The Impact on Share of Category Requirements and Word-of-Mouth Behavior , 2001 .

[85]  Katherine N. Lemon,et al.  Understanding Customer Experience Throughout the Customer Journey , 2016 .

[86]  Straub,et al.  Editor's Comments: An Update and Extension to SEM Guidelines for Administrative and Social Science Research , 2011 .

[87]  Millissa F. Y. Cheung,et al.  Service co-creation in social media: An extension of the theory of planned behavior , 2016, Comput. Hum. Behav..

[88]  Michael Trusov,et al.  Determining Influential Users in Internet Social Networks , 2010 .

[89]  Jun Sun,et al.  Internet banking diffusion: A country-level analysis , 2015, Electron. Commer. Res. Appl..

[90]  Emilio J. Castilla.  Vaccines: Preventing Disease & Protecting Health Edited by Ciro A. de Quadros Annapolis Junction, MD: Pan American Health Organization (PAHO) Publications, 2004. 412 pp., illustrated. $62.00 (paper) , 2005 .

[91]  J. Roldán,et al.  Applying Maximum Likelihood and PLS on Different Sample Sizes: Studies on SERVQUAL Model and Employee Behavior Model , 2010 .

[92]  Paul A. Pavlou,et al.  Psychological Contract Violation in Online Marketplaces: Antecedents, Consequences, and Moderating Role , 2005, Inf. Syst. Res..

[93]  Tibert Verhagen,et al.  Benefitting from virtual customer environments: An empirical study of customer engagement , 2015, Comput. Hum. Behav..

[94]  Kristopher J Preacher,et al.  Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models , 2008, Behavior research methods.

[95]  C. Ruiz-Mafé,et al.  Internet banking loyalty: evaluating the role of trust, satisfaction, perceived risk and frequency of use , 2011 .

[96]  D. Watts,et al.  Influentials, Networks, and Public Opinion Formation , 2007 .

[97]  J. Bettman.  An information processing theory of consumer choice , 1979 .

[98]  Alastair M. Morrison,et al.  Dual-route communication of destination websites , 2012 .