This paper documents the existence of the direct and indirect (via word-of-mouth) effects of service quality on new customer acquisition, usage and retention using behavioral data from the launch of a new video on demand type service. For this technology, service quality - the quality of the...

We study the optimal customer-acquisition and customer-retention decisions over an infinite planning horizon of the representative firm in a monopolistically competitive industry. Both the long-term and short-term equilibria of the industry are characterized by a constant optimal retention rate....

Conflicts between marketing and sales functions concerning customer acquisition process in business-to-business firms hurt profits. Marketing claims that sales disregards qualified leads; sales questions lead quality. To address such conflicts and avoid threats to profits, we consider several...

We consider the problem of optimal allocation of the marketing budget between customer acquisition and customer retention by a firm over the trade cycle. In line with the Schumpeterian idea of creative destruction, we find that under perfect capital markets customer retention increases with the...

We investigate the trade-off between acquisition and retention efforts when customers are sensitive to the quality of service they receive, i.e., whether they get timely access to a company's resources when requested. We model the problem as a multi-class queueing network with new and returning...

We examine the valuation role of customer acquisition cost, retention and usage in the wireless industry during the period 1997–2004. We develop and test a model that links customer acquisition cost, customer retention and call usage to future financial performance and valuation. In doing so,...

Acquisition of new customers involves both opportunity and risk, and it is important for firms to predict and manage the risks involved in customer acquisition. Despite its importance, the management of risk in customer acquisition has not been the subject of much academic research. This paper...