The power of social influence and customer–firm interactions in predicting non-transactional behaviors, immediate customer profitability, and long-term customer value

Abstract

Customers increasingly interact with firms across multiple touch points, which influence their overall perceptions and their future choices. Drawing on social capital theory, we investigate the causal paths from different touch points (social influence, customer informational inquiries, and firm-initiated contacts) to non-transactional behaviors, and their impact on customer profitability and customer lifetime value (CLV). To the best of our knowledge, no research to date has simultaneously focused on analyzing three different types of interactions in an empirical way, or their financial and non-financial consequences.We used longitudinal data for a sample of 1990 customers. The results show that social influence is a crucial determinant of non-transactional behaviors. CIIs affect customer participation and provide short-term and long-term benefits, while FICs influence long-term value only. Managerial implications are articulated in four key guidelines for managers: (1) identifying firms’ role; (2) customer selection; (3) leveraging investments in touch points; and, (4) marketing accountability.