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Dead or alive? A formal decision model for deciding on customer recovery investments

: Kleindienst, Dominikus; Waldmann, Daniela

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Leimeister, J.M. ; Univ. St. Gallen, Institut für Wirtschaftsinformatik:
13. Internationale Tagung Wirtschaftsinformatik, WI 2017. Tagungsband : Towards thought leadership in digital transformation; 12.-15. Februar 2017, Universität St. Gallen
St. Gallen: Universität St. Gallen, 2017
Internationale Tagung Wirtschaftsinformatik (WI) <13, 2017, St. Gallen>
Conference Paper, Electronic Publication
Fraunhofer FIT ()
customer recovery; customer migration; customer information; digitization; decision model

As digitization makes customer migration easier and more attractive, managing customer recovery becomes increasingly important for companies. Thereby, the challenge for organizations is to avoid two error types that can occur with customer relation recovery. First, mistakenly investing in customer relations that are active anyway (alive customer relations), or second, mistakenly not investing in migrated customer relations (dead customer relations). Consequently, in order to support organizations with such recovery investment decisions, considering the probability if a customer relation is alive or dead is necessary. Based on this probability, an economically reasonable decision has to be made whether to invest in an individual customer relations recovery or not. However, existing literature often neglects the above mentioned probability. Accordingly, based on a comprehensive discussion of related work, we propose a formal decision model on whether to invest in a customer relations recovery considering the probability that the customer relation is still alive or dead. To demonstrate the decision models applicability, an illustrative case with a sample calculation is presented.