Skip to main content
SpringerLink
Log in
Book cover

International Workshop on Enterprise Applications and Services in the Finance Industry

FinanceCom 2007: Enterprise Applications and Services in the Finance Industry pp 151–164Cite as

Explaining the Adoption of Value Metrics in Retail Banks’ Customer Management

  • Conference paper

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 4))

Abstract

A competitive customer management system requires the use of adequate metrics for performance controlling and management. This is of particular relevance for industries focusing their value creation on marketing and sales as it is the case in retail banking. Customer Lifetime Value (CLV) and related metrics are well-accepted solutions in scientific literature, but the diffusion into bank practice has not fully taken place yet. Adoption modeling can help explaining the use of CLV and identify major factors of influence for its adoption. In analogy to the Technology-Organization-Environment (TOE) framework which structures influential factors for the adoption of technological innovations, we developed an Innovation-Organization-Environment model, transferring the TOE approach to the adoption of a generic innovation. The competitive pressure is identified as a dominating driver, but perceived ease of use is also of high relevance, whereas a negative link from firms’ profitability to the adoption of CLV is revealed.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   39.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Peppard, J.: Customer Relationship Management (CRM) in Financial Services. European Management Journal 18, 312–327 (2000)

    Article  Google Scholar 

  2. Payne, A., Frow, P.: A Strategic Framework for Customer Relationship Management. Journal of Marketing 69, 167–176 (2005)

    Article  Google Scholar 

  3. Kumar, V., Lemon, K.N., Parasuraman, A.: Managing Customers for Value: An Overview and Research Agenda. Journal of Service Research 9, 87–94 (2006)

    Article  Google Scholar 

  4. Jain, D., Singh, S.S.: Customer Lifetime Value Research in Marketing: a Review and Future Directions. Journal of Interactive Marketing 16, 34–46 (2002)

    Article  Google Scholar 

  5. GartnerG2: GartnerG2 Says Financial Services Providers Must Calculate Customer Lifetime Value to Improve Profitability. Stamford, Conn (2003)

    Google Scholar 

  6. Reinecke, S.: Marketing Performance Management: empirisches Fundament und Konzeption für ein integriertes Marketingkennzahlensystem. Dt. Univ.-Verl., Wiesbaden (2004)

    Google Scholar 

  7. Reichold, A., Kolbe, L., Brenner, W.: Performance Measurement of CRM in Financial Services. In: Radnor, Z., Kennerley, M. (eds.) Performance Measurement and Management:Public and Private, pp. 859–866. Emerald Group Publishing, Edinburgh (2004)

    Google Scholar 

  8. Karakostas, B., Kardaras, D., Papathanassiou, E.: The state of CRM adoption by the financial services in the UK: an empirical investigation. Information & Management 42, 853–863 (2005)

    Article  Google Scholar 

  9. Bowman, D., Narayandas, D.: Linking Customer Management Effort to Customer Profitability in Business Markets. Journal of Marketing Research (JMR) 41, 433–447 (2004)

    Article  Google Scholar 

  10. Doyle, P.: Valuing Marketing’s Contribution. European Management Journal 18, 233–245 (2000)

    Article  Google Scholar 

  11. Gupta, S., Zeithaml, V.: Customer Metrics and Their Impact on Financial Performance. Marketing Science 25, 718–739 (2006)

    Article  Google Scholar 

  12. Venkatesan, R., Kumar, V.: A Customer Lifetime Value Framework for Customer Selection and Resource Allocation Strategy. Journal of Marketing 68, 106–125 (2004)

    Article  Google Scholar 

  13. Bayón, T., Gutsche, J., Bauer, H.H.: Customer Equity Marketing: Touching the Intangible. European Management Journal 20, 213–222 (2002)

    Article  Google Scholar 

  14. Eberling, G.: Kundenwertmanagement: Konzept zur wertorientierten Analyse und Gestaltung von Kundenbeziehungen. Dt. Univ.-Verl., Wiesbaden (2002)

    Google Scholar 

  15. Berger, S.C., Gensler, S.: Evaluating customer management implementations. In: Proceedings of the IIMA Conference on Research in Marketing 2007, Indian Institute of Management, Ahmedabad (2007)

    Google Scholar 

  16. Hennig-Thurau, T.: Relationship Marketing Success Through Investments in Customers. In: Hennig-Thurau, T. (ed.) Relationship marketing: gaining competitive advantage through customer satisfaction and customer retention, pp. 127–146. Springer, Heidelberg (2000)

    Google Scholar 

  17. Bell, D., Deighton, J., Reinartz, W.J., Rust, R.T., Swartz, G.: Seven Barriers to Customer Equity Management. Journal of Service Research 5, 77–85 (2002)

    Article  Google Scholar 

  18. Berger, P.D., Nasr, N.I.: Customer Lifetime Value: Marketing Models and Applications. Journal of Interactive Marketing 12, 17–30 (1998)

    Article  Google Scholar 

  19. Blattberg, R.C., Deighton, J.: Manage Marketing by the Customer Equity Test. Harvard Business Review 74, 136–144 (1996)

    Google Scholar 

  20. Rust, R.T., Lemon, K.N., Zeithaml, V.A.: Return on Marketing: Using Customer Equity to Focus Marketing Strategy. Journal of Marketing 68, 109–127 (2004)

    Article  Google Scholar 

  21. Wiesel, T.: Kundenkenngrößen und Unternehmenswert. University of Frankfurt, Frankfurt/Main (2006)

    Google Scholar 

  22. Ryals, L., Payne, A.: Customer relationship management in financial services: towards information-enabled relationship marketing. Journal of Strategic Marketing 9, 3–27 (2001)

    Google Scholar 

  23. Wiesel, T., Skiera, B., Villanueva, J.: Customer Equity – An Integral Part of Financial Reporting. Journal of Marketing 72 (in press, 2008)

    Google Scholar 

  24. Kumar, V.: CLV: The Databased Approach. Journal of Relationship Marketing 5, 7–35 (2006)

    Article  Google Scholar 

  25. Rogers, E.M.: Diffusion of innovations. Free Press, New York (2003)

    Google Scholar 

  26. Riemenschneider, C.K., Harrison, D.A., Mykytyn Jr., P.P.: Understanding it adoption decisions in small business: integrating current theories. Information & Management 40, 269–285 (2003)

    Article  Google Scholar 

  27. Harrison, D.A., Mykytyn Jr, P.P., Riemenschneider, C.K.: Executive Decisions About Adoption of Information Technology in Small Business: Theory and Empirical Tests. Information Systems Research 8, 171–195 (1997)

    Article  Google Scholar 

  28. Davis, F.D.: Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology. MIS Quarterly 13, 319–340 (1989)

    Article  Google Scholar 

  29. Ajzen, I.: Understanding attitudes and predicting social behavior. Prentice-Hall, Englewood Cliffs (1980)

    Google Scholar 

  30. Lucas Jr., H.C., Swanson, E.B., Zmud, R.W.: Implementation, Innovation, and Related Themes Over The Years In Information Systems Research. Journal of the Association for Information Systems 8, 206–210 (2007)

    Google Scholar 

  31. Plouffe, C.R., Hulland, J.S., Vandenbosch, M.: Research Report: Richness Versus Parsimony in Modeling Technology Adoption Decisions: Understanding Merchant Adoption of a Smart Card-Based Payment System. Information Systems Research 12, 208–223 (2001)

    Article  Google Scholar 

  32. Venkatesh, V., Morris, M.G., Davis, G.B., Davis, F.D.: User Acceptance of Information Technology: toward a Unified View. MIS Quarterly 27, 425–478 (2003)

    Google Scholar 

  33. Jeyaraj, A., Rottman, J.W., Lacity, M.C.: A review of the predictors, linkages, and biases in IT innovation adoption research. Journal of Information Technology 21, 1–23 (2006)

    Article  Google Scholar 

  34. Tornatzky, L.G., Fleischer, M., Chakrabarti, A.K.: The processes of technological innovation, Lexington, Mass. Lexington Books (1990)

    Google Scholar 

  35. Zhu, K., Kraemer, K., Sean Xu, K.: Electronic business adoption by European firms: a cross-country assessment of the facilitators and inhibitors. European Journal of Information Systems 12, 251–268 (2003)

    Article  Google Scholar 

  36. Kuan, K.K.J., Chau, P.Y.K.: A perception-based model for EDI adoption in small businesses using a technology-organization-environment framework. Information & Management 38, 507–521 (2001)

    Article  Google Scholar 

  37. Zhu, K., Dong, S., Xu, S.X., Kraemer, K.L.: Innovation diffusion in global contexts: determinants of post-adoption digital transformation of European companies. European journal of information systems 15, 601–616 (2006)

    Article  Google Scholar 

  38. Chau, P.Y.K., Tam, K.Y.: Factors Affecting the Adoption of Open Systems: An Exploratory Study. MIS Quarterly 21, 1–24 (1997)

    Article  Google Scholar 

  39. Rust, R.T., Zeithaml, V.A., Lemon, K.N.: Driving customer equity: how customer lifetime value is reshaping corporate strategy. Free Press, New York (2000)

    Google Scholar 

  40. Keiningham, T.L., Aksoy, L., Bejou, D.: How Customer Lifetime Value Is Changing How Business Is Managed. Journal of Relationship Marketing 5, 1–6 (2006)

    Article  Google Scholar 

  41. Hoekstra, J.C., Leeflang, P.S.H., Wittink, D.R.: The Customer Concept: The Basis for a New Marketing Paradigm. Journal of market-focused management 4, 43–76 (1999)

    Article  Google Scholar 

  42. Haenlein, M., Kaplan, A.M., Beeser, A.J.: A Model to Determine Customer Lifetime Value in a Retail Banking Context. European Management Journal 25, 221–234 (2007)

    Article  Google Scholar 

  43. Xu, M., Walton, J.: Gaining customer knowledge through analytical CRM. Industrial Management & Data Systems 105, 955–971 (2005)

    Article  Google Scholar 

  44. Benbasat, I., Barki, H.: Quo vadis, TAM? Journal of the Association for Information Systems 8, 212–218 (2007)

    Google Scholar 

  45. Tuzovic, S., Bruhn, M.: Integrating customer orientation, employee compensation and performance management: a conceptual framework. International Journal of Business Performance Management 7, 255–274 (2005)

    Article  Google Scholar 

  46. Gopalakrishnan, S., Damanpour, F.: The Impact of Organizational Context on Innovation Adoption in Commercial Banks. IEEE Transactions on Engineering Management 47, 14–25 (2000)

    Article  Google Scholar 

  47. Nord, W.R., Tucker, S.: Implementing routine and radical innovations, Lexington, MA. Lexington Books (1987)

    Google Scholar 

  48. Damanpour, F.: Organizational Size and Innovation. Organization Studies 13, 375–402 (1992)

    Article  Google Scholar 

  49. Utterback, J.M.: Innovation in Industry and the Diffusion of Technology. Science 183, 620–626 (1974)

    Article  Google Scholar 

  50. Swanson, E.B.: Information Systems Innovation Among Organizations. Management Science 40, 1069–1092 (1994)

    Article  Google Scholar 

  51. Stoneman, P., Myung Joong, K.: Technology Adoption and Firm Profitability. Economic Journal 106, 952–962 (1996)

    Article  Google Scholar 

  52. Wahrenburg, M., Hackethal, A., Friedrich, L., Gellrich, T.: Strategic decisions regarding the vertical integration of human resource organizations: evidence for an integrated HR model for the financial services and non-financial services industry in Germany, Austria and Switzerland. International Journal of Human Resource Management 17, 1726–1771 (2006)

    Article  Google Scholar 

  53. Teo, H.H., Wei, K.K., Benbasat, I.: Predicting intention to adopt interorganizational linkages: an institutional perspective. MIS Quarterly 27, 19–49 (2003)

    Google Scholar 

  54. Gatignon, H., Robertson, T.S.: Technology Diffusion: An Empirical Test of Competitive Effects. Journal of Marketing 53, 35–49 (1989)

    Article  Google Scholar 

  55. To, L.M.: Determinants affecting organizations’ intent to adopt e-tailing: a study based on innovation theories. SIGCSE Bull. 36, 243–243 (2004)

    Article  Google Scholar 

  56. Beccalli, E., Casu, B., Girardone, C.: Efficiency and Stock Performance in European Banking. Journal of Business Finance & Accounting 33, 245–262 (2006)

    Article  Google Scholar 

  57. Hinshaw, M.: A survey of key success factors in financial services marketing and brand management. Journal of Financial Services Marketing 10, 37–48 (2005)

    Article  Google Scholar 

  58. Ramaswami, S.N., Bhargava, M., Srivastava, R.: Market-based Assets and Capabilities, Business Processes, and Financial Performance. Working Paper. Marketing Science Institute (2004)

    Google Scholar 

  59. Tschoegl, A.E.: Size, Growth, and Transnationality among the World’s Largest Banks. Journal of Business 56, 187–201 (1983)

    Article  Google Scholar 

  60. Brislin, R.W.: Back-Translation for Cross-Cultural Research. Journal of Cross-Cultural Psychology 1, 185–216 (1970)

    Article  Google Scholar 

  61. Dibbern, J.: The sourcing of application software services: empirical evidence of cultural, industry and functional differences. Physica, Heidelberg (2004)

    Google Scholar 

  62. Chin, W.W.: The Partial Least Square Approach to Structural Equation Modeling. In: Marcoulides, G.A. (ed.) Modern Methods for Business Research, pp. 295–336. Lawrence Erlbaum Associates, Mahwah (1998)

    Google Scholar 

  63. Wold, H.: Systems under Indirect Observation Using PLS. Praeger, New York (1982)

    Google Scholar 

  64. Ringle, C.M., Wende, S., Will, A.: SmartPLS. University of Hamburg (2005)

    Google Scholar 

  65. Korner, V., Zimmermann, H.-D.: Management of Customer Relationship in Business Media. Electronic Markets 10, 162–168 (2000)

    Article  Google Scholar 

  66. Jarvis, C.B., Mackenzie, S.B., Podsakoff, P.M.: A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research. Journal of Consumer Research 30, 199–218 (2003)

    Article  Google Scholar 

  67. Mian, A.: Distance Constraints: The Limits of Foreign Lending in Poor Economies. Journal of Finance 61, 1465–1505 (2006)

    Article  Google Scholar 

  68. Ryals, L.: Making Customer Relationship Management Work: The Measurement and Profitable Management of Customer Relationships. Journal of Marketing 69, 252–261 (2005)

    Article  Google Scholar 

  69. Cao, Y., Gruca, T.S.: Reducing Adverse Selection Through Customer Relationship Management. Journal of Marketing 69, 219–229 (2005)

    Article  Google Scholar 

  70. O’Sullivan, D., Abela, A.V.: Marketing Performance Measurement Ability and Firm Performance. Journal of Marketing 71, 79–93 (2007)

    Article  Google Scholar 

  71. Podsakoff, P.M., MacKenzie, S.B., Jeong-Yeon, L., Podsakoff, N.P.: Common Method Biases in Behavioral Research: A Critical Review of the Literature and Recommended Remedies. Journal of Applied Psychology 88, 879–903 (2003)

    Article  Google Scholar 

  72. Bagozzi, R.P., Youjae, Y.: On the Evaluation of Structural Equation Models. Journal of the Academy of Marketing Science 16, 74–94 (1988)

    Article  Google Scholar 

  73. Bollen, K., Lennox, R.: Conventional wisdom on measurement: A structural equation perspective. Psychological Bulletin 110, 305–314 (1991)

    Article  Google Scholar 

  74. Homburg, C., Baumgartner, H.: Beurteilung von Kausalmodellen: Bestandsaufnahme und Anwendungsempfehlungen. In: Hildebrandt, L., Homburg, C. (eds.) Die Kausalanalyse: ein Instrument der empirischen betriebswirtschaftlichen Forschung, pp. 343–369. Schäffer-Poeschel, Stuttgart (1998)

    Google Scholar 

  75. Tenenhaus, M., Vinzi, V.E., Chatelin, Y.-M., Lauro, C.: PLS path modeling. Computational statistics & data analysis 48, 159–206 (2005)

    Article  Google Scholar 

  76. Götz, O., Liehr-Gobbers, K.: Analyse von Strukturgleichungsmodellen mit Hilfe der Partial-Least-Squares(PLS)-Methode. Die Betriebswirtschaft 64, 714–738 (2004)

    Google Scholar 

  77. Sellin, N., Keeves, J.P.: Path analysis with latent variables. Elsevier Publishers, London (1994)

    Google Scholar 

  78. Phillips, L.A., Calantone, R.: International technology adoption: Behavior structure, demand certainty and culture. Journal of Business & Industrial Marketing 9, 16–28 (1994)

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. E-Finance Lab Frankfurt and University of Frankfurt, Mertonstraße 17, 60325, Frankfurt, Germany

    Sven C. Berger & Sebastian F. Martin

Authors
  1. Sven C. Berger
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Sebastian F. Martin
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Daniel J. Veit Dennis Kundisch Tim Weitzel Christof Weinhardt Fethi A. Rabhi Federico Rajola

Rights and permissions

Reprints and permissions

Copyright information

© 2008 Springer-Verlag Berlin Heidelberg

About this paper

Cite this paper

Berger, S.C., Martin, S.F. (2008). Explaining the Adoption of Value Metrics in Retail Banks’ Customer Management. In: Veit, D.J., Kundisch, D., Weitzel, T., Weinhardt, C., Rabhi, F.A., Rajola, F. (eds) Enterprise Applications and Services in the Finance Industry. FinanceCom 2007. Lecture Notes in Business Information Processing, vol 4. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-78550-7_10

Download citation

  • DOI: https://doi.org/10.1007/978-3-540-78550-7_10

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-78549-1

  • Online ISBN: 978-3-540-78550-7

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics

Search

Navigation