consumer brand relationships in the real world

14
1 CBR in the real world a practitioner's pov [email protected] Copyright, GfK Custom Research North America, 2011

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Page 1: Consumer brand relationships in the real world

1

CBR in the real world

a practitioner's pov

[email protected]

Copyright, GfK Custom Research North America, 2011

Page 2: Consumer brand relationships in the real world

2

There is nothing so

practical as a

good theory

- Kurt Lewin

Lewin, K. (1951) Field theory in social science; selected theoretical papers. D. Cartwright (ed.). New York: Harper &

Row.

Page 3: Consumer brand relationships in the real world

3

Some good theories

• Exit, Voice & Loyalty

– Albert O. Hirschman, 1970

• Commitment and satisfaction in

romantic relationships: A test of

the investment model

– Caryl Rusbult, 1980 & ff

Hirschman, A.. (1970) Exit, voice & loyalty: Responses to decline in firms, organizations and states. Cambridge, MA:

Harvard University Press.

Rusbult, C. (1980) Commitment and satisfaction in romantic relationships: A test of the investment model. Journal of

Experimental Social Psychology. 3

Page 4: Consumer brand relationships in the real world

4

Responses to decline in firms,

organizations and states

Destructive Constructive

Active Exit Voice

Passive Neglect Loyalty

commitment higherlower

alts

better

worse

Page 5: Consumer brand relationships in the real world

5

Rusbult

investment model

COM = f(SAT + INV – ALTs)

Page 6: Consumer brand relationships in the real world

6

Investments

Intrinsic Extrinsic

Material

• Unique/proprietary

channel paths or ways

of interacting

• Rewards programs

• Supplies/gear

• Property (shared)

• Contracts

Psychological/

Social

• Time/tenure

• Predictability

• Emotional involvement/

participation

• Identification with

the brand

• Mutual friends/

acquaintances or co-

worker relationships

• Normative/social/

moral pressures

• Community ties

Page 7: Consumer brand relationships in the real world

7

Brand commitment

Performance

Alternatives

Investment

Persistence

Pro-Relationship

Behaviors

> Devaluing alternatives

> Positive illusions

> Accommodation behaviors

> Willingness to sacrifice

> Forgiveness

> Cognitive interdependence

Trust

Commitment

Page 8: Consumer brand relationships in the real world

8

GfK relationship model

Trapped Committed

Exit/

InertSwitchable

A>altsalt>A

High

Low

Competitive Performance

Investment

Page 9: Consumer brand relationships in the real world

9

39%54%

39%

30%

12%8%

11% 8%

0%

25%

50%

75%

100%

Low Profit High Profit

Model validation

63%

24%

7% 6%

0%

25%

50%

75%

100%

Committed Switchable Trapped Exit

Share of Deposits/Investments

Trapped

Committed

Exit

Switchable

0%

25%

50%

75%

100%

1 2 3 4 5 6 7 8

DDA Price Sensitivity

Trapped

Committed

Exit

Switchable

Account Price Difference ($)

8.0

4.73.3

-1.7

-20

-15

-10

-5

0

5

10

15

20

Committed Switchable Trapped Exit

Business With Bank In Next 12 Mos.

Incre

ase

Decre

ase

SOW $ sensitivity

∆ SOW profitability

Page 10: Consumer brand relationships in the real world

10

Time series validation

99% 99% 99% 99% 99% 99% 98% 98% 98% 98% 98% 98%

95%96%96%96%96%

97%97%97%98%98%

95%

100%

93%94%94%94%95%

95%96%

96%97%

97%

98%

86%

87%88%

88%89%

90%

91%

92%93%

93%

97%

95%

84%

86%

88%

90%

92%

94%

96%

98%

100%

102%

0 1 2 3 4 5 6 7 8 9 10 11 12

Months

Ho

us

eh

old

Re

ten

tio

n

Committed

Exit

Switchable

Trapped

Average Modeled Customer

Retention for a 12 Month Period

0.000.00

0.02

0.03

0.05

0.06

0.08

0.100.11

0.13

0.14

0.16

0.18

0.19

0.100.09

0.080.07

0.060.06

0.050.04

0.030.02

0.11

0.040.040.040.030.030.020.020.020.010.01

0.01

-0.04-0.04-0.03-0.03-0.03-0.02-0.02

-0.02-0.01-0.010.00 -0.01

-0.10

-0.05

0.00

0.05

0.10

0.15

0.20

0.25

0 1 2 3 4 5 6 7 8 9 10 11 12

Months

To

tal

Se

rvic

es

Qu

an

tity

Gro

wth Committed

Exit

Switchable

Trapped

Average Modeled Growth

In Total Services for a 12 Month Period

attrition growth

Page 11: Consumer brand relationships in the real world

11

Practical application

• Size & Trend

• Stimulators & Simulators

Trapped Committed

Exit/

InertSwitchable

A>altsalt>A

High

Low

Competitive Performance

Investment

Page 12: Consumer brand relationships in the real world

12

Size & trend

3 5 % 3 4 %3 9 % 4 1%

3 8 %3 3 %

3 9 % 3 8 % 3 9 % 3 6 %3 3 %

4 3 %3 9 % 3 9 % 3 8 %

4 2 %3 7 % 3 9 % 4 1%

4 5 %4 0 % 4 1%

4 7 %4 3 %

4 6 % 4 4 %

3 3 %

4 4 %3 8 % 3 8 %

4 1%3 8 %

3 0 %3 4 % 3 6 %

29% 29%

29%28% 31%

27%

26%33% 31%

32%

25%

26% 31% 31% 32% 27%

29% 26%29%

33%35%

37%23%

35% 31%

28% 47%

39%

41% 40% 36%

22%34%

30% 29%

13% 15%

15% 10% 12%

12%

11%

12% 12% 14%

9%

6%10% 11%

14%14%

15%12%

11%

7% 12%9%

11%

6%9%

3%7%

6% 8% 8%

12%

24% 23%17%

21% 19%

28%24%

17% 18% 18%

33%

25%20%

16% 18% 20%23%

19% 16%13% 13%

20%13%

19% 16%

26% 24%28%

10%16%7%

9%

19% 24%16%11%

14%17%

15%

0%

20%

40%

60%

80%

100%

1 2 3 4 1 1 1 1 1 1 1

C*

S

T

E

Brand A Brand B Brand ZBrand DBrand C Brand YBrand X

Favorability/Intention

Target>AltAlt>Target

High

Low

Psychological

Investment

*Committed (C)

Switchable (S)

Trapped (T)

Exit/Inert (E)

Page 13: Consumer brand relationships in the real world

13

Stimulators & simulators

Exit Switchable Committed TrappedCustomer Care Makes cust feel valued

Will be there when need them

Reps make cust feel cared for

Reps resolve problems quickly

Confidence best interest rate

Is flexible

Is caring

Is innovative

Practical/Usability Is for people like me

Takes hassle out of cc use

Is practical

Good for big ticket purchases

Acceptance Incr accepted at places want to use

Good for everyday purchases

Accepted at upscale places I go

(Not) will. make primary cc/not accepted

Rewards Offer rewards I value most

Offer best rewards in mkt

Protection Cares about protect my privacy

Proactive against id theft

Late Fees Doesn't charge many fees when late

Primary Secondary Tertiary

Page 14: Consumer brand relationships in the real world

14

New directions

• Pro-relationship behaviors

• CBR in social networks

• CBR metaphors