Capturing the hidden nature of customer relationship expansion: moving from the static to dynamic metrics of customer experience
(A2021-94516)

AUTHORS

Lily(Xuehui) Gao, University of Zaragoza; Iguácel Melero Polo, University of Zaragoza; F. Javier Sese, University of Zaragoza

ABSTRACT

This study investigates how different dimensions of the customer experience (i.e., trend, fluctuation, and the gains and losses in comparison with the reference point) affect customer relationship expansion over time. Building on prospect theory, we develop an integrated framework in which we test empirically using a longitudinal dataset that combines attitudinal and behavioral information for a sample of 13,761 customers, covering all firms in the industry in one European country for four major telecommunication service categories (mobile, broadband, TV, and landline). We apply hidden Markov modeling (HMM) techniques to uncover latent states of the customer relationship expansion and the results identify four states through which the relationship between customers and firms are expanded. The findings also reveal the central role played by the different dimensions of customer experience on promoting customer relationship expansion.