Management Science and Financial Engineering

The Korean Operations Research and Management Science Society (한국경영과학회)
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e-CRM and Digitization of Word of Mouth

  • Kim, Eun-Jin (Graduate School of Management, Korea Advanced Institute of Science and Technology) ;
  • Lee, Byung-Tae (Graduate School of Management, Korea Advanced Institute of Science and Technology)
  • Published : 2005.12.01
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Abstract

Well-known e-CRM strategy is to focus on profitable customers and pay less attention to unprofitable ones. Moreover, some researchers recommend not serving unprofitable ones any more. However, it often neglects customers indirect value. Deselecting unprofitable customers can raise the issue of bad word-of-mouth publicity especially in the age of the Internet. Some studies pointed out that a customers decision to buy a product or service is often strongly influenced by others. In this paper, we consider customers' word-of-mouth effect on quality learning of inexperienced customers. We show that firms implementing e-CRM must take the effect into the consideration when deselecting unprofitable customers.

Keywords

References

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