My research focuses on marketing strategy with a focus on organizational frontline research, customer defection, and customer reacquisition using multi-method empirics.
Published Articles
Pugh, Harrison B., Michael K. Brady, and Lucas M. Hopkins (2018), “A Customer Scorned: Effects of Employee Reprimands in Frontline Service Encounters,” Journal of Service Research, 21 (2), 219–34. http://journals.sagepub.com/doi/10.1177/1094670517746777
Selected Working Papers
Pugh, Harrison B., Colleen M. Harmeling, Michael K. Brady, Justin M. Lawrence, and Andrew T. Crecelius, “Managing Moral Misalignment and Donor Defection,” under 2nd round review at the Journal of Marketing Research.
Stakeholders increasingly expect nonprofit organizations to engage in sociopolitical advocacy by taking a public stance on divisive social or partisan issues. However, when a nonprofit’s stance runs counter to a segment of its donors’ values, those donors face a complex and difficult moral dilemma: Although the donor may defect from the nonprofit, this would also mean abandoning the vulnerable beneficiary of the individual’s donations. The authors conduct three studies involving 44,652 donors of a collaborating nonprofit to evaluate donor defection and reacquisition rates before and after the nonprofit’s public stance on a hot-button sociopolitical issue. Study 1 involves over 2 million donor observations matched with publicly available geopolitical data to demonstrate how donor defection varies based on donors’ opposition to the nonprofit’s stance and the content of communications sent by the nonprofit prior to its advocacy. Study 2 involves text analyses of 2,172 phone records between donors and the nonprofit to provide further evidence of theorized mechanisms. Study 3 examines reacquisition of donors who defected due to the nonprofit’s sociopolitical advocacy. The three studies demonstrate that communicating beneficiary-focused content has benefits at multiple stages of the defection process, including an 85% decrease in defection and a 141% increase in reacquisition, for donors who are otherwise most at risk following the nonprofit’s sociopolitical advocacy.
Pugh, Harrison B., Colleen M. Harmeling, and Michael K. Brady, “Effective Win-back Window Strategies,” firm data collected and analyzed (28,947 customers’ transactions and marketing communications), expected submission to the Journal of the Academy of Marketing Science.
In 2015, defected customers cost U.S. companies $72.13 billion in net income (Recurly Inc. 2016). To offset these losses, firms often try to win these customers back. We propose that the customer’s mode of defection, either active (where customers explicitly make the decision to cancel future services or close their account) or passive (where customers defect due to instances of credit card decline or expiration, or not making a scheduled payment) leaves defectors in different psychological and emotional states. In turn, defectors are likely to differ on how they attend to and interpret communications in the win-back window – the critical period the firm has after the defection to attempt to reacquire the customer. Therefore, their mode of defection determines the most effective strategy to regain these customers; however, most firms treat these customers the same. In a three-study, multimethod design, this research examines how different marketing strategies in the win-back window affect reacquisition based on customers’ mode of defection. Of 28,947 defected customers of a large multinational charitable organization, we find that 60% left passively, without indicating to the firm their intent to do so. In Study 1, analyses of five years of firm-provided, longitudinal data on defected customers’ 1.4 million payments and 2.5 million marketing communications from the firm suggests that targeted win-back strategies are more likely to recover active defectors, whereas cross-selling strategies and loyalty initiatives are more likely to recover passive defectors. Building on insights from Study 1, Study 2 is a field experiment with the same firm, agreed upon to begin in fall 2017 intending to replicate the Study 1 findings in an ongoing exchange relationship. Study 3, a lab study currently underway, tests our process mechanisms. Model-free evidence suggests that applying the most effective reacquisition strategy could yield an additional $21 million per year to the focal firm.
Pugh, Harrison B., Colleen M. Harmeling, and Michael K. Brady, “Identity-Based Defectors and Their Reacquisition,” expected submission to the Journal of Marketing.
Unlike performance-based defectors who leave firms in response to some form of utility deficit with the offering, identity-based defectors are customers who sever relationships due to a perceived mismatch between their identities and their perceptions of the firm’s identity. Using consumer data from a multinational nonprofit firm and a framework derived from customer-company identification theory, this study examines optimal communication strategies for the reacquisition of identity-based customer defectors and reveals suboptimal reacquisition results related to traditional reacquisition messaging. Specifically, Study 1 uses 12 years of firm-provided, longitudinal data on 1,390 defected customers and shows that whereas traditional win-back communications can reacquire performance-based defectors, corporate brand communications focused on reinforcing positive, social initiatives of the firm are more effective for identity-based defectors. A longitudinal growth model in Study 2 on reacquired defectors further demonstrates that identity-based defectors represent more revenue in their second lifetimes when they receive corporate brand communications after their initial defection. This article introduces identity-based defectors to extant literature and outlines specific routes by which firms should approach their reacquisition.
Pugh, Harrison B., Willy Bolander, Riley Dugan, and Dwayne Gremler, “Making the Role of Time Explicit in Service Research through Longitudinal Growth Modeling,” invited for 1st revision at the Journal of Service Research.
Though frequent calls have been made for the increased use of longitudinal analyses in service research, a common misconception among researchers is that obtaining and analyzing data for longitudinal studies is prohibitive in its complexity. This belief is unfortunate, given that the ability to detect change over time is critical for studying many phenomena in the service literature. To address this misconception, we advocate for the increased use of longitudinal growth modeling (LGM) in service research. LGM, a straightforward, longitudinal method, can aid service researchers in obtaining a more nuanced understanding of phenomena than can be obtained with more commonly applied cross-sectional, and even other types of longitudinal, methods. Herein we provide examples of longitudinal studies in the service literature and describe how LGM could extend many of these findings. We provide insights on how to perform LGM by presenting an illustrative example that details a step-by-step implementation of a simple longitudinal experiment on service failure. Then, to encourage more service research using LGM, we propose some research questions that could be addressed with the use of LGM. Finally, as this method is not equally applicable to all research questions, we discuss the limitations and drawbacks of LGM.