Tuesday February 18, 2020 – 12:15-13:45pm – Ecully campus – Room B1070
Brand Retention and Radical Innovation
Sarah GELPER – School of Industrial Engineering
Abstract: Retaining customers is an essential part of value creation. Especially in turbulent markets with rapid technological change and radical innovation, existing customers constitute a great potential for the survival of incumbent brands because of the trust they have built in these established relationships. Yet the customer’s consideration to adopt a new technology might, at the same time, trigger their consideration to adopt a new brand. In this study, we investigate brand retention in the context of cloud disruption in the B2B software market. Using a large panel data set on software usage of 4,659 customers of the 30 largest software brands across 5 functionalities (CRM, ERP, BI, HR and Finance), we compare brand retention probabilities on the individual customer level before, during, and after cloud adoption. Our results show that brand retention at the moment of cloud adoption is only 65.47%, which is much lower than the baseline brand retention of 98.12% when staying with the old on-premise solution. After cloud adoption, brand retention again increases to 96.29%. The strong decline in brand retention at the moment of cloud adoption is consistent across functionalities, time and brands. Software brands that try to maximize retention should thus target their marketing efforts towards customers that are considering to move to the cloud.
Sarah Gelper is Associate Professor of Marketing Analytics at the Innovation, Technology Entrepreneurship and Marketing group of the TU/e. She holds a Masters degree in Economics and a PhD in Business Statistics, both from the Katholieke Universiteit Leuven. In 2010, she earned a Marie Curie postdoctoral fellowship from the European Union at the Erasmus University Rotterdam.
Sarah’s research focusses on quantitative marketing research. She studies the role of social interactions in the new product adoption process. Her research has been published in the marketing field (e.g. Journal of Marketing Research, International Journal of Research in Marketing, Journal of Retailing) as well as in statistics journals (e.g. Annals of Applied Statistics, Journal of Forecasting, Journal of Statistical Planning and Inference).