הפקולטה לניהול ע"ש גילפורד גלייזר שמחים להזמינכם לסמינר הפקולטי
עם האורח המיוחד
Vithala Rao
Cornell University
:Promoting Mobile Channel Usage
Balancing Channel Substitution and Customer Relationship Management
Abstract
With the proliferation of mobile communication technology, firms are making efforts to develop mobile platform to better engage with their customers. More importantly, firms are incentivized to promote mobile channel for cost considerations. However, the cost benefit for these technologies will not accrue unless these electronic channels account for a significant share of total transactions. Against this background, we develop and estimate an integrated structural model that considers consumers’ choices of both service requests and channels to send out these requests using a Hidden Markov Model. We estimate our model with a unique dataset of 100,000 customers from a leading financial institution in the US over a 30-month period. Estimation results suggest that consumers’ channel and service choices are very sensitive to process time, which in general reflects service quality and their latent relationship with the firm. The estimation results further enable us to conduct counter-factual experiments to assess the implications of selected managerial policies to promote mobile channels. We find that firms could promote the usage of mobile channel by either lowering the process time of non-mobile channels (Strategy 1) or improving the process time through mobile channels (Strategy 2). Not surprisingly, our simulation results suggest that the former strategy promotes mobile channel at the cost of stronger customer relationships. To avoid the undesired outcomes on customer relationships, firms should design a channel differentiated strategy by lowering service quality of a subset of services requested through certain channels. In spite of the attractiveness of Strategy 1, firms should still make efforts to improve the process time through mobile channel as it promotes both channel usages and customer relationships
