Critical Analysis of 'Profitable Customer Management: Reducing Costs by Influencing Customer Behaviour' (Persson, 2013)

Abstract

A review and critique of the article by Persson from a Theory of Knowledge Management (TKM) perspective. The study examines not only cost containment measures, but takes a view on behavioural management as well. An overview of TKM is provided. TKM is then linked to the article’s three theories regarding costs, along with three methods for proposed reduction of direct costs related to the customer service programs of the firm. Two assumptions are made in the article: costs can be lowered while customer satisfaction ratings are maintained, and some diminution of customer retention rates is tolerable, provided a cost savings is net. These assumptions are demonstrated evidence of the cultural facets of TKM. Three case studies are presented with three qualitative examples of cost mitigation and increased customer satisfaction with the common aspect of diverting customers to self-service options over costly in-person interactions. However, it is suggested that additional and consistent quantitative evidence across the cases, especially in regards to the firms’ cost savings outcomes, would have provided further strength to the argument.