Proactive Customer Education, Customer Retention, and Demand for Technology Support: Evidence from a Field Experiment

Manufacturing and Service Operations Management, Forthcoming

38 Pages Posted: 29 Apr 2014 Last revised: 27 Oct 2015

See all articles by German Retana

German Retana

INCAE Business School

Chris Forman

Cornell University - Dyson School of Applied Economics and Management; Georgia Institute of Technology - Scheller College of Business

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business

Date Written: April 26, 2015

Abstract

Do service provider efforts to educate customers influence customer outcomes? We analyze the outcome of a field experiment executed by a major public cloud infrastructure services provider in 2011. 366 out of 2,673 customers who adopted the service during the experiment received a service intervention: an engagement through which the provider offered initial guidance on how to use basic features of the service. Before execution, it was unclear if this proactive customer education would have positive or negative effects on customer retention and demand for technology support. We show the treatment reduces by half the number of customers who churn from the service during the first week. Further, treated customers ask 19.55% fewer questions during the first week of their tenure than the controls. Although the treatment’s effects decay within one week, we show that such proactive customer education can have significant economic benefits for the provider. In particular, we find that treated customers increase their accumulated usage of the service by 46.57% in the eight months after signup. Finally, we provide evidence that the effects of the treatment are strongest among customers who have less experience with the provider.

Keywords: field experiment, proactive service, service co-production, customer retention, technology support, cloud computing.

Suggested Citation

Retana, German and Forman, Chris and Wu, D. J., Proactive Customer Education, Customer Retention, and Demand for Technology Support: Evidence from a Field Experiment (April 26, 2015). Manufacturing and Service Operations Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2430012 or http://dx.doi.org/10.2139/ssrn.2430012

German Retana (Contact Author)

INCAE Business School ( email )

La Garita, Alajuela 960-4050
Costa Rica
+506 2437-2374 (Phone)

HOME PAGE: http://www.germanretana.net

Chris Forman

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business ( email )

800 West Peachtree Street, NW
Atlanta, GA 30308
United States
404-894-4364 (Phone)
404-894-6030 (Fax)

HOME PAGE: http://mgt.gatech.edu/wu

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