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When Customer Referral Programs Backfire

Idea posted: July 2019
  • Marketing

A new study reveals that customer referral programs can sometimes backfire: customers are less likely to recommend innovative products when they are rewarded for finding new customers. The study explores the reasons for this surprising negative impact.

Idea #745
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Photo by Dogancan Ozturan (Source: Unsplash)

How CRM Reaches Customers' Social Networks

Idea posted: June 2017
  • Marketing

Marketers may be underestimating the impact of their marketing campaigns, which, a new study shows, impacts not only the target customers, but also the social connections of those customers.

 

Idea #660
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Why Customers Put Up With Rude Luxury Shop Assistants

Idea posted: December 2016
  • Marketing

Surprisingly, retail rejection (customers greeted with unfriendly sales staff in luxury stores, for example) can increase brand image in the eyes of ‘rejected’ consumers, thus increasing sales in the short term. In the long term, however, consumers will resent the rejection, and the brand pays the price.

Idea #640
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The McDonalds sign in Times Square (Source: Wikimedia Commons)

Mapping Brand Strategy: Balancing Centrality Vs Distinctiveness

Idea posted: August 2015
  • Strategy
  • Marketing

A new tool, based on scoring brands on their centrality (i.e. the brand of record) and distinctiveness (i.e. the brand that stands out from the crowd) can help marketers and strategists determine the best paths for growth and profitability. 

Idea #540
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Alexander Graham Bell at the opening of the long-distance line from New York to Chicago, 1892 (Courtesy: Library of Congress)

Incentivizing Older Consumers to Adopt New Technologies

Idea posted: March 2015
  • Marketing

Companies traditionally ignore older consumers when marketing new technologies and innovations. While the non-monetary adoption costs to older consumers are high as previous research suggests, a new mathematical model — that looks at consumers over their entire lifecycle — reveals that monetary costs to older consumers actually decrease with age. 

Idea #502
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William Glackens, The Shoppers, 1907-1908, Chrysler Museum of Art, Norfolk, Virginia

How Price Expectations Drive Customer Purchasing Decisions

Idea posted: November 2014
  • Marketing

Customers have price expectations in their minds before entering a store, as well as expectations of prices in other stores. How customers update their expectations once they see the actual prices can help businesses better manage their promotions and sales for maximum effect. 

Idea #463
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Markdown Vs Everyday-Low-Prices: The Impact of Regret and Availability Misperceptions

Idea posted: October 2014
  • Strategy
  • Learning & Behaviour
  • Marketing

The behavioural motives of consumers — such as regret over buying too soon or too late and misperceptions about the product’s future availability — should be considered as companies develop their optimal pricing and inventory strategies.

Idea #453
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Replica of Rushworh's music store in Liverpool, where the Beatles bought their first Gibson guitars (Source: Wikipedia Commons)

When Showrooms Help Online Companies

Idea posted: August 2014
  • Marketing
  • Operations

Nearly every bricks-and-mortar company will have an online presence today. But a few intrepid companies are going in the opposite direction: online companies are starting to open offline showrooms — and research shows the result is a boost in sales… and happy customers.

Idea #434
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Guests lounge at the pool at the Dolphin Village Hotel in Shavei Zion, 1954 (Source: Wikimedia Commons)

The Overlooked Longevity of Experiential Goods

Idea posted: March 2014
  • Marketing

When consumers feel financially constrained, they are more likely to choose tangible material purchases over experiential purchases in the belief that those material purchases will ‘last’ longer. This longevity factor can be deceiving, however; material purchases can often be more frivolous (and thus less valuable) than experiential purchases — and experiential purchases can last longer, through memories or well-being for example, than material ones.

Idea #351
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Is New Product Exclusivity Always a Good Idea?

Idea posted: January 2014
  • Marketing

Having exclusive sales or distribution rights to a new product may sound like a good deal. New research shows, however, that exclusivity can reduce profits, especially if the firm does not have locked-in loyal customers, because it eliminates the potential for greater word-of-mouth marketing. 

Idea #312
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Genius Bar at the Apple Store, Prince Street, SoHo, Manhattan, New York City, 2003 (Source: Wikimedia Commons)

Servitization: Implications for Sales and Marketing

Idea posted: January 2014
  • Marketing

In a business world where competition is higher than ever before, it has become increasingly difficult for firms to differentiate solely on products. That is why many firms have begun focusing on services too. This Idea looks at this trend, referred to here as ‘servitization’ and considers how you can ensure the shift to such sales is a successful one for your organization.

Idea #293
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Shoppers in Pushkar Fair, Rajasthan, 2007 (Source: Wikimedia Commons).

How and Why Shoppers Make Unplanned Purchases

Idea posted: December 2013
  • Marketing

Through analysis of video tracking of consumers in stores, new research offers a greater understanding of how and why consumers consider and make unplanned purchases at the point of purchase. The research highlights the categories of products most likely to be considered as unplanned purchases; correlations between categories of planned purchases and unplanned purchases; and the behaviour of consumers most likely to make unplanned purchases (e.g. standing close to the shelf or talking to an employee increases the chances of conversion). Retailers can use this information to develop

Idea #277
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First Choice Most Chosen

Idea posted: November 2013
  • Strategy
  • Marketing

Human beings may be biologically hardwired to prefer the first option presented to them, particularly if they have to make that choice quickly. Businesses can use this finding to tailor their marketing and other strategies to nudge customers towards a particular product or service. Recent research confirms the importance of being first and why this should inform point-of-sale, online, and other marketing messages.

Idea #267
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The Effect of Pruning Sales Channels

Idea posted: November 2013
  • Marketing

A firm that eliminates a search or purchase channel, such as a catalogue, will lose customers who prefer that channel. The decision to eliminate a channel can still be profitable in the long run, as long as the savings from the elimination is greater than the lost revenues. Managers can help the math by taking proactive steps to reduce the level of lost revenues.

Idea #252
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YWCA Mobile Club shop visiting an anti-aircraft site somewhere in Britain, 1943 (Source: Wikimedia Commons)

Managing Customer Relations When Demand Exceeds Supply

Idea posted: October 2013
  • Marketing

When demand outpaces inventory suppliers cannot fulfil everyone’s orders. Two academic researchers have developed a quantitative model that suppliers can use to make the right decisions on which orders to fill, and which to delay, while keeping the greatest number of customers happy in the short- and long-term.

Idea #249
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Using Adaptive Decision-Making in Customer Management

Idea posted: October 2013
  • Learning & Behaviour
  • Marketing

How do managers make decisions related to customer relationship management? This Idea looks at research that shows that the majority of managers are adaptive in their decision-making, and those that demonstrate the highest accuracy in their decisions also employ “fast and frugal heuristics” – i.e. rather than using careful analysis of information, they use experience-based techniques for problem solving.

Idea #241
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A sales assistant demonstrates a blackout coat for dogs at Selfridge's in London, circa 1940. The coat would ensure the dog was visible during the dark nights of the blackout (Source: Wikimedia Commons)

The Secret of a Good Sales Assistant: Reading Customer Mood

Idea posted: September 2013
  • Leadership & Change
  • Learning & Behaviour
  • Marketing

The ability to interpret facial expressions and body language is an important interpersonal skill. However, relatively little is known about how it affects people’s perceptions and experiences of retailers. New research suggests that sales assistants sensitive to ‘non-verbal cues’ are viewed positively by customers but negatively by third-party observers. This has important implications for the way ‘customer-facing’ staff are recruited, trained and evaluated — and for the way shops are designed. 

Idea #220
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Word-of-Mouth and On/Off Line Marketing

Idea posted: August 2013
  • Marketing
Institutions: Insper

Increases in online communities have led to behaviours that influence online activities, such as shopping, becoming more and more important for executives to understand if they want their businesses to flourish. One of these behaviours is word-of-mouth communication (WOM). In this Idea, the impact of WOM on consumption is analysed, with a discussion of those strategies that work and those that do not.

Idea #190
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Business people negotiating

Precise First Offers in Negotiations Vs Rounding

Idea posted: June 2013
  • Marketing
  • Operations

Negotiators will typically use round numbers in their first offers. Research from Columbia Business School shows, however, that beginning with precise rather than rounded numbers gives negotiators, whether buyers or sellers, an edge.

Idea #153
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I am half-sick of shadows, said the Lady of Shalott', William Waterhouse, 1916 (Source: Wikimedia Commons)

Homeworking Beats Outsourcing: a 6 Step Model

Idea posted: May 2013
  • Strategy
  • Leadership & Change
  • Learning & Behaviour
  • Marketing
  • Operations
Institutions: Henley Business School

The use of homeworkers as call centre operatives can benefit both businesses and homeworkers. For companies, common advantages include cost savings, increased flexibility, reduced absenteeism and improved customer satisfaction. But there are also potential problems to overcome. By adopting a six-step model, business leaders can plan homeworking projects effectively, identifying the key areas they need to address.

Idea #142
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The Impact of Technology and Social Media on Sales Relationships

Idea posted: March 2013
  • Strategy
  • Marketing

Technology, and especially social media such as Facebook and LinkedIn, has fuelled an ‘always on’ culture. The pervasiveness of social media is fundamentally altering the methods through which buyers and sellers interact — salespeople feel obliged to respond immediately to communications from anywhere in the world, at whatever time. Potentially there is a revolutionary change in the way contemporary selling is conducted, driven in large measure by social media technology.

Idea #112
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Global Sales Teams and the Impact of National Culture

Idea posted: February 2013
  • CSR & Governance
  • Leadership & Change
  • Learning & Behaviour
  • Marketing
Institutions: HEC Paris

As international sales forces become more prevalent companies need to standardize their sales force management controls across national borders. This research looks at how the effectiveness of sales force control models is influenced by national culture, and how sales team managers need to understand and balance cultural influences that promote behaviour controls over outcome controls.

Idea #101
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