Socialize More, Pay Less: Randomized Field Experiments on Social Pricing

We propose social pricing, a novel pricing framework under which consumers with higher social capital enjoy a better price. Conceptually, social pricing enables firms to achieve price discrimination based on a consumer’s social value. This is in sharp contrast with traditional price discrimination strategies where price differentiation typically hinges on consumers’ personal value. We design and conduct two randomized field experiments on a leading online fresh food retailer to understand the value of social pricing. Social pricing has been commonly credited for its effectiveness in new customer acquisition. Interestingly, our study reveals that it is also highly effective on existing consumers. Our analysis shows that social pricing can increase an online retailer’s profit by 40% solely from existing consumers, compared with regular firm-offered discounts. Exploration of the underlying mechanisms reveals that perceived engagement and social cost are the main drivers, which not only help to increase purchasing frequency but also induce higher order value per purchase. In a follow-up experiment, we vary the rules of social interactions by requiring heterogeneity in consumers’ purchasing frequencies. The results suggest that a heterogeneity-based strategy can further amplify the benefits of social pricing.

Framework to Understand and Deploy AI-Based Smart CRM in the Airline Industry

This is the age of AI. Soon what customers think will be understood by the smart applications on their mobile devices and the information—most of which will be pre-processed based on the customer personas—will be available at the blink of an eye. In this chapter a critical analysis of how AI bolsters CRM capabilities in the airline industry is conducted. To understand that, AI capabilities are surveyed and its transformational effects on CRM and its impact on customer acquisition, retention, loyalty, and experience are explored in depth. In the end, a customer journey-based deployment framework is presented that supports the finding of the AI-CRM implementation use cases.

The Paradox of Luxury in Digitalization

Seeing the success of digital platforms and advancement, social media marketing has strengthened the relationship between buyer and seller from a mere commercial transaction to a personal connection. The outcomes of this interaction are meticulous, and like other industries, it has also revolutionised the luxury products industry. It has become pertinent for the luxury brands to participate in the online visibility for customer awareness, customer engagement, customer acquisition, and customer retention. Though certain challenges are there, there is a need to develop strategies to mitigate them for better positioning, building online trust and online value.

Entrepreneurial Marketing dan Jejaring Sosial dalam Usaha Kecil: Studi Kasus tentang Bisnis Petshop di Kabupaten Bandung

This article aims to examine how small entrepreneurs use social networks to develop and implement marketing strategies. The type of small business studied is the Petshop business. The research method used is qualitative by conducting in-depth interviews and analysis with Petshop entrepreneurs through an entrepreneurial marketing perspective. Ultimately, we found that Petshop entrepreneurs are using social connections through market intelligence, new customer acquisition, and current customer retention to create and deliver more value to customers. Entrepreneurs take steps to build emotional attachments and carry out marketing activities through giving gifts or by approaching customers through the community, and most of the entrepreneurs in the Petshop business in Bandung Regency do marketing through physical (offline) stores and online shops. The majority of entrepreneurs stated that the application of the entrepreneurial marketing concept and strengthening social networks were important in the continuity of the Petshop business, only one Petshop entrepreneur had contradictory statements, especially in the aspect of searching for market information.

Social Media Exploration and Exploitation by Small and Medium Enterprises for Business Continuity

This paper aims to examine social media usage by small and medium enterprises (SMEs) in the context of business continuity. A key concern for businesses in times of disasters, such as the COVID19 pandemic or hurricanes, is continuity. This is especially true for SMEs that lack the expertise, awareness, and ability to dedicate specific resources to disaster planning and management. SMEs are quick to explore social media for functions such as customer acquisition, perhaps due to greater flexibility and agility than large companies. However, SMEs are constrained by a lack of resources, limiting the extent to which they can exploit social media. We collect data from 68 SMEs and analyze the extent to which they explore and exploit social media tools. Our findings suggest that the firms fail to exploit their social media presence to leverage long-term strategic benefits, which would be helpful during a disaster. Our contribution includes ways to analyze social media exploration and exploitation and suggestions to strategically manage social media use for business continuity.

Social Media Exploration and Exploitation by Small and Medium Enterprises for Business Continuity

This paper aims to examine social media usage by small and medium enterprises (SMEs) in the context of business continuity. A key concern for businesses in times of disasters, such as the COVID19 pandemic or hurricanes, is continuity. This is especially true for SMEs that lack the expertise, awareness, and ability to dedicate specific resources to disaster planning and management. SMEs are quick to explore social media for functions such as customer acquisition, perhaps due to greater flexibility and agility than large companies. However, SMEs are constrained by a lack of resources, limiting the extent to which they can exploit social media. We collect data from 68 SMEs and analyze the extent to which they explore and exploit social media tools. Our findings suggest that the firms fail to exploit their social media presence to leverage long-term strategic benefits, which would be helpful during a disaster. Our contribution includes ways to analyze social media exploration and exploitation and suggestions to strategically manage social media use for business continuity.

Designing two-period decentralized service chain incentives with the consideration of customer acquisition and retention

PurposeThe authors address a two-dimensional (both customer acquisition and retention) incentive in a decentralized service chain consisting of a risk-neutral brand and agent (or averse). Design/methodology/approachThe authors focus on the relationship between acquisition and retention, that is, retained customers (repeated purchases) are based on and come from the acquired (new) customers in the former period. The authors also design a two-period separate incentive on both dimensions.FindingsThe authors found that a targeted incentive strategy should be applied for achieving more revenue when the incentive intensities are relatively small. Otherwise, the brand needs to adjust the targeted incentive strategy into incentivizing the opposite dimension, particularly on acquisition. Under the optimal contract, the brand needs to be very careful with deciding the fixed part of the incentive salary and the incentive intensities on both dimensions. For example, the fixed salary initially decreases and then increases in the incentive intensities. For the optimal incentive policies, the brand should incentivize acquisition but outsource retention if the agent is risk-neutral. When the agent is becoming risk-averse, the brand should lower its incentive intensity as the risk degree and variances become larger. Interestingly, the brand may benefit from introducing risks.Originality/valueThe study contributes to the literature by considering the following points. First, the authors extend the principal-agent incentive model by considering two-period decisions of customer acquisition and retention. Second, based on the two-period principal-agent problem, the authors design separate incentive intensities on acquisition and retention, respectively. While, most of the literature focused on acquisition incentives. Third, different from other works focusing on either risk-neutral or risk-averse environments, the authors consider both and compare the cases of risk-neutral and risk-averse to analyze the impact of risk on the optimal decisions and the brand's expected profit.

Artificial Intelligence (AI): Revolutionizing Digital Marketing

Artificial intelligence (AI)-enabled digital marketing is revolutionizing the way organizations create content for campaigns, generate leads, reduce customer acquisition costs, manage customer experiences, market themselves to prospective employees, and convert their reachable consumer base via social media. Real-world examples of organizations who are using AI in digital marketing abound. For example, Red Balloon and Harley Davidson used AI to automate their digital advertising campaigns. However, we are early in the process of both the practical application of AI by firms broadly and by their marketing functions in particular. One could argue that we are even earlier in the research process of conceptualizing, theorizing, and researching the use and impact of AI. Importantly, as with most technologies of significant potential, the application of AI in marketing engenders not just practical considerations but ethical questions as well. The ability of AI to automate activities, that in the past people did, also raises the issue of whether marketing professionals will embrace AI as a means to free them from more mundane tasks to spend time on higher value activities, or will they view AI as a threat to their employment? Given the nascent nature of research on AI at this point, the full capabilities and limitations of AI in marketing are unknown. This special edition takes an important step in illuminating both what we know and what we yet need to research.