In Pursuit of Enhanced Customer Retention Management: Review, Key Issues, and Future Directions

46 Pages Posted: 23 Jan 2017 Last revised: 5 Apr 2017

See all articles by Eva Ascarza

Eva Ascarza

Harvard Business School

Scott Neslin

Dartmouth College - Tuck School of Business

Oded Netzer

Columbia Business School - Marketing

Zachery Anderson

Electronic Arts

Peter Fader

University of Pennsylvania - Marketing Department

Sunil Gupta

Harvard University - Business School (HBS)

Bruce Hardie

London Business School

Aurelie Lemmens

Rotterdam School of Management, Erasmus University Rotterdam

Barak Libai

Interdisciplinary Center (IDC) Herzliyah - Adelson School of Entrepreneuship

David Neal

Duke University

Foster Provost

New York University

Rom Y. Schrift

University of Pennsylvania - The Wharton School

Date Written: March 7, 2017

Abstract

In today’s turbulent business environment, customer retention presents a significant challenge for many service companies. Academics have generated a large body of research that addresses part of that challenge – with a particular focus on predicting customer churn. However, several other equally important aspects of managing retention have not received similar level of attention. This suggests a managerial problem not completely solved, and a program of academic research not completely aligned with managerial needs. Therefore, our goal is to draw on previous research and current practice to provide insights on managing retention and identify areas for future research. This examination leads us to advocate a broad perspective on customer retention. We propose a definition that extends the concept beyond the traditional binary retain/not retain view of retention. We discuss a variety of metrics to measure and monitor retention. We present an integrated framework for managing retention that leverages emerging opportunities offered by new data sources and new methodologies such as machine learning. We highlight the importance of distinguishing between which customers are at risk and which should be targeted – as they aren’t necessarily the same customers. We identify tradeoffs between reactive and proactive retention programs, between short-term and long-term remedies, and between discrete campaigns and continuous processes for managing retention. We identify several areas of research where further investigation will significantly enhance retention management.

Suggested Citation

Ascarza, Eva and Neslin, Scott and Netzer, Oded and Anderson, Zachery and Fader, Peter and Gupta, Sunil and Hardie, Bruce and Lemmens, Aurélie and Libai, Barak and Neal, David and Provost, Foster and Schrift, Rom Y., In Pursuit of Enhanced Customer Retention Management: Review, Key Issues, and Future Directions (March 7, 2017). Tuck School of Business Working Paper No. 2903548; Columbia Business School Research Paper No. 17-16. Available at SSRN: https://ssrn.com/abstract=2903548 or http://dx.doi.org/10.2139/ssrn.2903548

Eva Ascarza (Contact Author)

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
United States

HOME PAGE: http://evaascarza.com

Scott Neslin

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Oded Netzer

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

Zachery Anderson

Electronic Arts ( email )

Peter Fader

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States

Sunil Gupta

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Bruce Hardie

London Business School ( email )

Regent's Park
London, NW1 4SA
United Kingdom

Aurélie Lemmens

Rotterdam School of Management, Erasmus University Rotterdam ( email )

3000 DR Rotterdam
Netherlands

Barak Libai

Interdisciplinary Center (IDC) Herzliyah - Adelson School of Entrepreneuship ( email )

P.O. Box 167
Herzliya, 46150
Israel

David Neal

Duke University ( email )

Box 90204
Department of Political Science
Durham, NC 27708
United States

Foster Provost

New York University ( email )

44 West Fourth Street
New York, NY 10012
United States

Rom Y. Schrift

University of Pennsylvania - The Wharton School ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States

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