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Destination ā€˜eā€™: Detecting and Managing Customer Uncertainty in a Forced Migration Initiative Within a Business-to-Business Market

by Rotte, Kristin N.

Abstract (Summary)
Current trends of rapidly advancing technology and consolidation within markets have contributed to making customer migration a necessity for the survival of firms. Customer migration refers to the process of moving existingcustomers from their current product/service (or channel) to a new, improved one. Despite the large amount of anecdotal evidence pointing to the difficulties and uncertainties experienced by customers and suppliers when engaging a migration situation, this issue has received scarce attention in the academic literature. The objectives of this research are to understand the: (a) drivers of customer uncertainty in a forced migration situation, (b) impact of marketing interventions (e.g., targeting) and firm-specific relationship variables (e.g., complexity) on mitigating uncertainty and fostering migration (vs. defection), (c) indicators of customer vulnerability (who are the defectors?), (d) timing of migration decisions (who is likely to defer choice?) and (e) potential time-dependent effects of marketing interventions on the specific migration decision. The setting for the investigation is the financial services industry. The innovation, Electronic Retirement Plan (ERP), pertains to the offering of retirement plans for small firms, via the Internet. The data for the research come from (a) a pre-market study conducted in April 1999 focused on assessing perceptions and migration intentions toward ERP, and (b) actual migration data (both choice and timing) in the 28 months following the introduction of ERP into the marketplace. The research proceeds within two studies. In Study 1 (n=265), employing the pre-market research and actual migration data for firms currently facing a forced migration to ERP, I utilize the recently developed JUMP model (Chandrashekaran, et al. 2000), which, given one measure of a stated intention, statistically and simultaneously separates the drivers of intention magnitude from those of intention uncertainty. Next, I introduce the Fuzzy Intention Translation (FIT) model of migration behavior that illustrates the fuzzy intention-behavior link by articulating a psychological mechanism within which uncertainty-laden intentions translate into actual behavior. In Study 2 (n=940), two stages of analysis are conducted to understand the role of marketing actions and relationship-specific variables on the timing and probability of migration. In the first stage, I utilize a split-hazard duration model to investigate the effects of variables on the timing of migration decisions, while accounting for a portion of customers who will resist making a migration decision. In the second stage, I examine the potential time-dependent nature of the migration process by estimating the effects of marketing actions and relationship-specific variables at various periods of the migration decision process.
Bibliographical Information:

Advisor:

School:University of Cincinnati

School Location:USA - Ohio

Source Type:Master's Thesis

Keywords:customer migration uncertainty resolution relationship management choice deferral translation of fuzzy intentions

ISBN:

Date of Publication:01/01/2002

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