The Power of Personal Values on Customer Satisfaction and Retention

In a world where the future of Marketing Customer Management is facing exponential growth of advanced psychographics profiling instead of traditional, demographic segmentation, it becomes mandatory to explore and understand the vast eco-system of human behaviour in correlation with marketing elements. Also, as an important part of the global economy has a clear trend towards two main models, sharing economy (expected to spin to an arising concept of “Empathy Economy”) & subscription as a service, Customer Retention Strategies are rapidly increasing in importance as the above-mentioned models bring higher customer volatility than existing ones. In the same time, it was important to understand the relevance of the Customer Retention Strategies Needs proposal by Dragnea M. Abstract


Introduction
In a world where the future of Marketing Customer Management is facing exponential growth of advanced psychographics profiling instead of traditional, demographic segmentation, it becomes mandatory to explore and understand the vast eco-system of human behaviour in correlation with marketing elements. Also, as an important part of the

Theoretic Considerations Customer Retention and Loyalty -The concepts and confusion.
For better and clear understanding of the role of Customer Retention and related strategies, the definition provided in 1970 by German economist O. Hirschman was considered. This definition had the advantage of being self-explanatory, comprehensive in its simplicity, fully related to the customer behaviour and, at the same time, valid and actual across the majority of business models and organizations. Hirschman states that the opposite of retention is the answer of customers when the quality of the services and products offered by an organization is decreasing. He defined it as the exit option: "Some customers stop buying the firm's products or some members leave the organization. [...] As a result, revenues drop, membership declines, and management is impelled to search for ways and means to correct the elements which have led to exit." (Hirschman, A.O. (1970). Exit, Voice, and Loyalty, USA: Harvard University Press).
As a confirmation that Hirschman's definition dating almost half a century is still highly accurate, more recent works are using the same principle to explain Customer Retention. "Customer retention can be seen as the mirror image of customer defection, where a high retention rate has the same significance as a low defection rate." (Rizal A. and Buttle F. (2001) Customer retention: a potentially potent marketing management strategy, UK: Journal of Strategic Marketing, Routledge).
Also, later on, Buttle confirms the initial definition and extends it: "Customer retention is the mirror image of customer defection or churn. High retention is equivalent to low defection. Customer retention is the maintenance of continuous trading relationships with customers over the long term." (Buttle F. (2009) Customer Relationship Management -Concepts and Technologies, USA: Elsevier Linacre House). Though, it is arguable that the latest definition from Buttle can be at the border of the most common confusion between Customer Retention and Customer Loyalty, found in both practical and academic fields: the concepts are explained more from a lexical perspective: a loyal customer can also be considered a retained customer. For example, a similar definition with Buttle's Customer Retention is given by Dixon, M., Freeman K., Toman, N. but for Customer Loyalty: "customers' intention to continue doing business with a company" (Dixon, M., Freeman, K. and Toman, N. (2010), Stop trying to delight your customers, USA: Harvard Business Review).
One of the best interpretations on the differences between Customer Loyalty and Customer Retention is provided by Frances Frei, Professor of Service Management at the Harvard Business School: "When companies pay customers through discounts to remain customers, it's a • Loyalty towards a product (relative to the indirect competition); • Loyalty towards a type of distribution, a certain place for sale, a certain company; • Loyalty towards a brand." Therefore, for the purpose of this paper, when referring to Customer Retention and Customer Loyalty, the main differentiator is the customers' intention (i.e. behaviour) -if there is no intention, then a Customer Loyalty strategy is in order to further increase revenue, while if there is an intention to churn, Customer Retention strategies are most suitable to keep the customer.
(2017) identified five needs of Customer Retention Strategies, as following, in order of their importance (with short version of terminology to be used further in this paper): • Knowing the customers and availability of information about them (Know your customers); • Retention strategies' adaptability to external and internal customers' feedback (Adaptability); • The power to influence customer decision (Influence decisions); • Freedom to decide the way to retain customers (Freedom in the decision of Retention); • The level of power you have to make changes (Power to Change); The results of these researches were obtained by questioning Romanian professionals actively working on Customer Retention Strategies and customer-facing related functions. Schwartz defines ten values while having, as main arguments, the fact that values have an increased probability of being universal "as they are grounded in one or more of three universal requirements of human existence with which they help to cope." -(1) needs as biological organisms; (2) social interaction; (3) groups welfare and survival needs. The ten values according to Schwartz are: "Selfdirection, Stimulation, Hedonism, Achievement, Power, Security, Conformity, Tradition, Benevolence, Universalism".
According to Schwartz, each value has its own defining goal and responds to a specific behavioural need. "Self-direction: independent thought and action-choosing, creating, exploring." Addressing the needs of control, independence, mastery (i.e. values as freedom, curiosity, creativity); (1) "Stimulation: excitement, novelty, and challenge in life." Answering the needs of diversity, stimulation for obtaining a rather positive level of energy than a frightening one (i.e. a varied life); (2) "Hedonism: pleasure or sensuous gratification for oneself." As a response to the need of satisfying personal pleasure (i.e. pleasure); (3) "Achievement: personal success through demonstrating competence according to social standards." Emphasizing the needs of reaching objectives, competence as imposed by social context (i.e. ambitious, successful); (4) "Power: social status and prestige, control or dominance over people and resources." Feeding the needs of having authority, dominance, control (i.e. wealth, social recognition and power); (5) "Security: safety, harmony, and stability of society, of relationships, and of self." Sustaining the needs of security either individual (i.e. health) or groups related (i.e. national security); (6) "Conformity: restraint of actions, inclinations, and impulses likely to upset or harm others and violate social expectations or norms." Fulfilling the needs of avoiding disruption and undermining others (i.e. obedience, self-discipline). (7) "Tradition: respect, commitment, and acceptance of the customs and ideas that one's culture or religion provides." Assuring the fulfilment of needs related to social groups practices, sometimes preconceived ideas regarding faith, destiny (i.e. respect for tradition, moderation); (8) "Benevolence: preserving and enhancing the welfare of those with whom one is in frequent personal contact (the 'in-group')." Obtaining a response for the needs of affiliation, pro bono care for the well-being of others (i.e. helpful, loyal, forgiving); (9) "Universalism: understanding, appreciation, tolerance, and protection for the welfare of all people and for nature." Deriving from the needs of survival of individuals and larger groups, as a resort for accepting that others are different to avoid perceived life-threatening conflict.
Also, Schwartz addresses the dynamics of the relationship between the ten basic values, proposing a circular, continuum structure in order to better define the motivational triggers when certain values are adjacent. He groups the values as following:

Overview
The research was done during an eight month timeframe (May 2017 -December 2018) to assure increased relevance by avoiding a time-context subjectivism of answers, using an online self-administrated questionnaire, with the majority of questions on a Likert-type scale. The choice of an online self-administrated questionnaire was considered the best option as it is aligned with the method currently widely used by companies when asking for feedback from their customerstherefore, a similar method was needed to avoid comparations discrepancies.
Also, the Likert-type scales were completed with low-end, middle and high-end verbal labels to bring more clarity for the respondents and increase the accuracy of the answers. (

Target Group
The main target group were customers in Romania, urban area, actively employed or self-employed, with focus on the most influencing and relevant for purchase behaviour analysis group in the Romanian macro-economy: a higher level of education and income per person. The assumption used for this research was that this group has the enlarged ability to change their behaviour in a less restrictive manner, as they hold both the financial conditions and education levels to make choices with a lower level of external constrains (i.e. low income per person generates a buying behaviour towards the cheaper products/services).

The questionnaire.
The questionnaire was structured in three parts:  Constantly adapts the entire experience (retail/online, prices, products, services, benefits) to its customers and the market, always among the first.

The power to influence customer decision;
The Online experience is built in such a way that it almost takes the decisions for you, in a way that helps you. 4. Freedom to decide the way to retain customers.
Constantly, things that you disliked in the overall experience (including services) were changed in better without the need of filling out a complaint. 5. The level of power you have to make changes.
Has a very good capacity and speed to react on a new offer or service/product launched by competitors.
The scales used for measuring the main brand-related indicators were: (a) Customer Satisfaction Score: from 1 to 10, where 10 is "very satisfied" and lower or equal to 7 is considered "Dissatisfied"; (b) Brand performance related to the Customer Retention Strategies Needs: from 1 to 10, where 10 is "very good performance"; (c) Churn Intention: from 1 to 5, where 1 is "no intention".

3) Personal
Values (based on Schwartz's theory) -a choice of top three according to importanceconcerning the purpose of this paper we considered the first choice -the Most Important Value; An additional note: the level of interference with the answers was limited as the total list of values was not entirely and one-time displayed. When the main question was prompted ("What is your most important value?"), there was no value listed so respondents needed to type a value from their top of mind. Also, to avoid mislabelling of potential free text and less accurate answers due to lack of presence for the top of mind value were included as choices similar lexical variations (synonyms) of the same value (i.e. wealth -money).

Data collection and Analysis
Data were collected while assuring full anonymity of respondents (to reduce social desirability bias) and up to date methods for distribution of the questionnaire, across communities considered representative for the chosen target group (i.e. social mediaincluding paid ads, email).
The data was prepared and analysed using SPSS Statistics. The total number of responses analysed was 345 with a Cronbach's Alpha of .771 on 7 items (Customer Satisfaction Score, Churn Intention and satisfaction with Customer Retention Strategies Needs -5 items). (1) Demographic profile of the target group (*NIS stands for National Institute of Statistics in Romania):    As seen above, the gender distribution was in line with the Romanian NIS reported distribution, while the age, education and average monthly income distribution confirmed the validity of the focus target of this research.
(2) Brand evaluation: The respondents were asked to evaluate a Brand in three areas: (a) Customer Satisfaction Score (b) Churn intention (c) Brand performance related to Customer Retention Strategies Needs (see Table 1). (a) Customer Satisfaction Score (on a scale from 1 to 10, where 10 is "very satisfied");    (b) Churn intention (on a scale from 1 to 5, where 1 is "no intention")    -An average level of Churn Intention at 2.39 shows a balanced approach from the customers when thinking about churning, although the level of satisfaction, as we saw, is closer to being dissatisfied.
-When analysing the Churn Intention for the segments with potentially significant differences in Customer Satisfaction Score vs. average (Men & 38-53 age groups) (see Table  14), a positive potential significant difference can be found, with a valid question to be answered further in this paper: Is there a statistical significant correlation between Customer Satisfaction and Churn Intention?     (a) Overall distribution:    , 1951) and from the organismic need for affiliation". So, it is viable to conclude that superior level of education comes with an increased focus for the need of belonging? Interesting to underline this in correlation with the fact that the Master Degree group represents 20% of the total population in Romania vs. 34% for College/University -therefore, a question arises: is it true that: the smaller the community you are part of, the higher the need of affiliation?  Interesting to observe that the 18-37 group has higher weights on Achievement and Hedonism. According to Schwartz, the continuum of related motivations of the two values represents a "self-centred satisfaction" motivation.

Preliminary conclusions summary:
(1) The research is valid and accurate from both NIS reported distribution related to the proposed target group characteristics and in relationship with Schwartz's Theory of Basic Human values; (2) The level of Customer Satisfaction is oriented rather towards dissatisfaction.
Therefore, to identify a potential "sweet-spot" that increases the satisfaction, two new metrics were added to segment this indicator: Main Channel of Interaction and Customer Age (1) Customer Satisfaction Score, Churn Intention and Customer Retention Strategy Needs.
(a) Level of correlation between the above-mentioned metrics.
As showed in  As previously concluded, the Customer Satisfaction Score in this research is closer to the dissatisfaction area. This being the case, two new metrics were added to identify if a certain experience and level of loyalty (measured in Customer Age) that can move the score towards "satisfied". The distribution of the Customer Satisfaction Score is as follows: Preliminary Conclusions: • The experience in the Physical store has the highest Customer Satisfaction Score, followed by Online and Using the Services; • The "sweet-spot" for Customer Age is 3-5 Years, except for cases where the customers are mostly interacting with the Brand by using services.
• In addition to the analysis of the Customer Satisfaction Score in relation with Main Channel of Interaction & Customer Age, the correlation matrix (Table 28 below) is partially confirming the relevance of the finding:  The other values selected in Table 29 (below) are showing moderate correlation: Self-direction, Universalism and Achievement.  Therefore, Customer Retention Needs theory is also supported by customers' answers. With a more in-depth analysis on a larger sample of customers, the proposed structure can be transformed in new a standalone business model. In practice, the five elements of the potential model can be used as main pillars for Customer Retention strategies -for example, an investment in Adaptability has the significant potential to lower the Churn Intention.

Most Important Value vs. Customer
Satisfaction Score and Churn Intention. The second objective of the research was to identify potential connections and correlations between traditional customer satisfaction, buying behaviour, previously identified Customer Retention Strategies Needs (Dragnea M., 2014) and the influence of Basic Values (Schwartz, Shalom H., 2012) in the customer behaviour.
Essentially, the objective can be considered achieved. Important variations of correlations between Customer Satisfaction Score and Churn Intention, depending on the Most Important Value choice are described in the results. For customers having Security or Benevolence as Most Important Value, the level of correlation is -.762 and -.721, whilst for the ones who chose Achievement or Universalism, is -.434 and -.485. The interpretation of these results, beyond the solid affirmation that personal values clearly have a strong potential to influence the Customer Satisfaction Score and Churn Intention, can be extended to a broad analysis from the psychological theories perspective.
For example, according to Schwartz, Security value has as a defining goal "sustaining the needs of security" and expresses a way to manage anxiety. According to a study done in 2010 (Heilman, M.R., Crișan G.L., Houser D., Miclea M., Miu A.C., (2010), Emotion Regulation and Decision Making Under Risk and Uncertainty, (USA: American Psychology Association) anxiety is associated with the decreased ability in decision-making. In correlation with the Churn definition (which, in fact, is a decision to quit a product or service previously used), it is important to conclude that there is an important potential to predict Churn Intention based on psychographics. Ipso facto, longitudinal research enhanced with more psychographic elements based on psychology theories and psychology expert interpretation is firmly recommended.

Findings Summary
Taking into account the two main objectives of the current research (1)

Limitations and Future Research
The limitations of this research are mainly caused by the methodology used to collect the responses, as a certain degree of subjectivism and the gap between actual answers and actions of the respondents. To minimize the impact of these limitations, several longitudinal studies with a focus on actual customer behaviours and psychographics is recommended. Also, we recommend using more complex statistical methods (see MONALIS, Prof. Dr. Mihăiță N.).