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An Empirical Investigation of the Impact of Communication Timing on Customer Equity

Authors:

Xavier Drèze
Andre Bonfrer

Publisher:

Journal of Interactive Marketing
2008, 22 (1), 36-50

Abstract:

The marketing literature has acknowledged the importance of Customer Equity (CE) as a benchmark for marketing performance. In this paper, we are interested in understanding the impact of communication frequency on customer retention and spending and thus, ultimately, on a firm's CE. An empirical study of this impact is conducted in the context of permission-based email marketing in the entertainment industry.
We find that inter-communication time has a dramatic impact on customer behavior. It affects both attrition and consumer surplus and thus has a critical impact on the value of a customer database. This impact is asymmetric; managers are advised to err on the side of longer rather than shorter inter-communication times.