Purpose:In the last 10 years, businesses taking advantage of market deregulation, call-centre, Intranet and Internet technology have broken traditional marketing norms and path dependent customer management practices. These businesses offer substantially lower prices and good customer service. In spite of anecdotal evidence of the high level of service complaints in the press, these businesses are expanding rapidly by growing the market and by taking share from traditional suppliers. Service failure recovery and complaint management are two areas which are extensively re-designed by such businesses. This paper identifies and examines such new practices. The authors suggest that the traditional 'customer-centricity' model is being replaced by a 'customer-compliance business model' (CCBM) of service provision. This new model and its propositions defy conventional thinking in the areas of service recovery and complaint management. Design/Methodology/Approach:Available data and research are reviewed, in an attempt to understand CCBM. Differences with the customer-centricity model are discussed. Findings:CCBM cannot be explained adequately by current assumptions in marketing. It breaks commonplace marketing expectations about service failure and recovery. Research limitations/implications:The emphasis is on explaining innovations in service recovery and complaint management. Practical implications:Companies which operate the CCBM model are of growing importance to developed, serviceorientated economies. We build upon evidence to show how CCBM businesses have abandoned or minimised costly customer centricity and have broken past norms and conventional marketing thinking and practice. Originality/value:The scarcity of research in this area is explained by the recent, rapid evolution of these new model businesses. This study reveals and makes sense of important trends in service provision, distinct from and incompatible with normative arguments in some academic writings that advocate service recovery excellence.4
A new type of business has grown in the past 10 years, predicated on the technical innovations provided by the Information Society. These innovations affect all aspects of social organisation but this paper attempts to map their effect on businesses only and on companies utilising database marketing in particular. The strategies and systems developed by companies across a range of sectors are in their infancy, and they are innovating and developing at such a pace that they enjoy competitive advantage over traditional businesses. Although enabled by ICT, these businesses have also broken path dependent practices in fulfi lment, supply chain and the provision of customer service. Due to commercial reasons, little information is available on the specifi cs of the operations of these new businesses that we refer to as ' customer compliance ' businesses. However, their success across sectors, even during the current recession, is obvious. This paper attempts to identify such new practices, link them to current marketing theory, and suggest implications for traditional businesses as well as academic research as the underlying theory is clearly inadequate and lags behind practitioner innovations. Journal of Direct, Data and Digital Marketing Practice (2009) 11, 30 -50. doi: 10.1057/dddmp.2009 Synopsis This paper offers an overview of the strategies, tactics and philosophy of a group of businesses that have emerged in the past 10 years by using internet, intranet and call centre technologies to automate their marketing and fulfi lment functions. Deregulation and globalisation, as well as easy broadband access have also driven their activities. Their innovative business models and strategies were initially discussed by the authors in a study of the service recovery and customer complaint handling of these companies (Kasabov and Warlow, forthcoming). 1In the EJM paper, we argued that companies across sectors were not actually practising ' customer-centricity ' , but rather made their customers ' compliant ' to their management systems. In return,
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