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The impact of customer-initiated communication and customer behaviour on contract renewal likelihood: An empirical study

Guevara, Carolina E. Cruz; Castro, Gene Steffan Chalan
Master thesis
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URI
http://hdl.handle.net/11250/2578564
Date
2018
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  • Master of Science [1116]
Abstract
PURPOSE

The purpose of the thesis is to contribute to customer retention literature by developing

an empirical model explaining which drivers affect renewal likelihood in a contractual

context. The framework consists of two primary constructs: customer-initiated

communication and customer behaviour. The thesis has three main objectives: To

evaluate the effect of customer-initiated communication (i.e. inquiries and complaints)

on renewal likelihood; to evaluate empirically the effect of customer behaviour as

predictor of renewal likelihood; and to explore how the interaction between

multichannel contract and cross-category usage affects renewal likelihood.

SCOPE

The research is based on panel data with a sample of 30 003 users of an online

product/service in collaboration with a leading Scandinavian media group.

FINDINGS

The thesis has empirically shown the relationship between customer-initiated

communication (i.e. inquiries and complaints) and renewal likelihood. Contrary to

previous research, complaints seem to have a positive influence on renewal likelihood,

which suggest that a voiced complaint may signal customer commitment. Furthermore,

behavioural variables such as cross-category usage, multichannel contract and past

renewals have a positive impact on renewal likelihood contract subscription. Lastly,

the interaction between multichannel contract and cross-category usage have negative

effect on renewal likelihood, suggesting a tension between channel value propositions

(i.e. overlapping offers, limited added value), which negatively influence the utility

derived from a multichannel contract.

CONTRIBUTION

The paper provides valuable insights related to customer-initiated communication and

behavioural influence on the likelihood of renewal in a contractual context. Existing

retention literature focuses on customer complaint or attitudinal variables (e.g.

satisfaction, commitment), but rarely include inquiry as customer-initiated

communication along with behavioural variables in a contractual context within the

same model.
Description
Masteroppgave(MSc) in Master of Science in Strategic Marketing Management - Handelshøyskolen BI, 2018
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Handelshøyskolen BI

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