The Impact of Goal Enabling Technology on Customer Lifetime Value

The Impact of Goal Enabling Technology on Customer Lifetime Value

Jake An, Andre Bonfrer, Christine Eckert

Service providers increasingly offer goal enabling technologies (GETs) in the pursuit of becoming more customer-centric. The popularity of GETs for firms is based on the assumption that enabling customers to set specific goals related to the service can improve not only the service's value to the customer, but also the customer's value to the service. Firms need to understand whether GETs influence the benefits customers derive from the service and if this translates into customer lifetime value. To best manage GETs' impact, they also need to be aware of possible boundary conditions of these effects. We use panel data from an investment services provider that introduced a GET to examine how customers who specified goals with GET changed their behavior and thereby customer lifetime value. We leverage a synthetic control structural matching method to enable estimation of changes in customer behavior for goal setters relative to  a comparable control group. The results indicate that the introduction of GET increases customers' goal-congruent behavior which in turn improves customer lifetime value. The results also indicate that the impact of GETs depends on several goal characteristics, namely customers' perceived goal attainment difficulty, motivation, and commitment at the time of goal setting. An inverted U-shape for each of these goal characteristics is identified, a feature that can guide practitioners to personalize goals to optimize performance for customers and firms.

Zoom Link: 

https://uni-frankfurt.zoom.us/j/97232449365?pwd=SEx5MG5neHdLdFFFOFlwS25EOWdFUT09

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More information on Christine Eckert can be found here.