Remco Prins & Peter C. Verhoef
Executive Summary
This study investigates the effects of direct marketing communications and mass marketing communications on the adoption timing of a new e-service among existing customers. The empirical study focuses on the adoption process of a new mobile e-service in the Dutch consumer market that was introduced in 2002 by one of the leading Dutch mobile telephone providers. Speeding up the adoption of newly introduced services is especially important in the telecommunications industry because services are often linked to large network technology investments. A successful introduction of these new services is required to get return on these investments.
However, the question is, Which marketing communications should the firm use to speed up adoption? The mass marketing communications the authors consider are specific new service advertising, as well as brand advertising from both the focal supplier and competitors. Using a split-hazard approach, the authors determine the effects of the considered marketing communications on adoption timing, accounting for the likelihood that a significant part of the customer base will never adopt the new e-service. They analyze individual adoption behavior with a sample of 6000 customers over 25 months. The results indicate that firms can use both direct marketing communications and mass marketing communications to shorten adoption timing, though the effect of direct marketing communications is much larger in this particular setting. Another finding is that new service advertising shortens the time to adoption, even when it is initiated by competitors, because it increases the penetration rate of the new service in the market.
Furthermore, the analysis of effects between relationship characteristics and marketing efforts suggests that loyal customers adopt sooner than relatively new customers. More important, loyal customers also tend to be more responsive to marketing efforts. Therefore, building customer loyalty is important not only for customer retention and cross-selling but also for the adoption of new and additional services.
Biography
Remco Prins is a doctoral candidate in the Erasmus Research Institute of Management, School of Economics, at Erasmus University Rotterdam, the Netherlands. He obtained his MSc in Business Economics in 2003 from the School of Economics at Erasmus University Rotterdam, the Netherlands. His research interests focus on new product adoption and postadoption usage of new products.
Peter C. Verhoef is Professor of Marketing in the Department of Marketing, Faculty of Economics, at the University of Groningen, the Netherlands. He obtained his PhD in 2001 from the School of Economics at Erasmus University Rotterdam, the Netherlands. His research interests focus on customer management, customer loyalty, multichannel issues, category management, and buying behavior of organic products. He has extensively published on these topics. His publications have appeared in multiple journals, including Journal of Marketing, Journal of Marketing Research, Marketing Science, Marketing Letters, Journal of Consumer Psychology, Journal of the Academy of Marketing Science, and Journal of Retailing. His work has been awarded with the Donald R. Lehmann Award for the best dissertation-based article in Journal of Marketing and Journal of Marketing Research in 2003. He is currently an editorial board member of Journal of Marketing, Journal of Retailing, Journal of Service Research, and International Journal of Electronic Commerce. He has extensive teaching experience with undergraduate, graduate, and doctoral students. He is also involved in teaching executive-level courses on customer management. He has consulting experience for several companies, such as KPN, UWV, and Achmea. Finally, he is the founder and director of the Customer Insights Center at the University of Groningen.
Journal of Marketing, Vol. 71, No. 2, April 2007
View Table of Contents