IDEAS home Printed from https://ideas.repec.org/a/kap/jmgtgv/v24y2020i3d10.1007_s10997-018-9447-3.html
   My bibliography  Save this article

RFM customer analysis for product-oriented services and service business development: an interventionist case study of two machinery manufacturers

Author

Listed:
  • Kati Stormi

    (Tampere University)

  • Anni Lindholm

    (Tampere University)

  • Teemu Laine

    (Tampere University)

  • Tuomas Korhonen

    (Tampere University)

Abstract

This study examines how original equipment manufacturers (OEMs) can segment their product-oriented services customers with the help of a recency, frequency, and monetary value (RFM) analysis of service consumption. The study is an interventionist case study that uses two large OEMs as case companies, both seeking profitable growth in the area of services. The originality of the paper is threefold. First, the research extends the RFM analysis using four product-support-service-specific variables, and it outlines the similarities and differences between the industrial service and consumer business contexts when using the RFM analysis. Second, by applying and modifying the RFM model to better suit the product-support-service context, the study contributes to the literature on the governance of product-oriented services in manufacturing. Third, the paper contributes to the literature on management accounting supporting service business development, by introducing a method that can use installed base and customer information to measure, analyze and govern the business potential of an industrial machinery “fleet”. In all, the paper is particularly helpful for service management and accounting academics and practitioners who wish to understand product-oriented service governance in environments in which there is a vast installed base of products at the customers, with remarkable potential for extending service business.

Suggested Citation

  • Kati Stormi & Anni Lindholm & Teemu Laine & Tuomas Korhonen, 2020. "RFM customer analysis for product-oriented services and service business development: an interventionist case study of two machinery manufacturers," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(3), pages 623-653, September.
    • Handle: RePEc:kap:jmgtgv:v:24:y:2020:i:3:d:10.1007_s10997-018-9447-3
    DOI: 10.1007/s10997-018-9447-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10997-018-9447-3
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10997-018-9447-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rust, Roland T. & Kumar, V. & Venkatesan, Rajkumar, 2011. "Will the frog change into a prince? Predicting future customer profitability," International Journal of Research in Marketing, Elsevier, vol. 28(4), pages 281-294.
    2. R. Ferrentino & M. T. Cuomo & C. Boniello, 2016. "On the customer lifetime value: a mathematical perspective," Computational Management Science, Springer, vol. 13(4), pages 521-539, October.
    3. Lino Cinquini & Paolo Collini & Alessandro Marelli & Andrea Tenucci, 2015. "Change in the relevance of cost information and costing systems: evidence from two Italian surveys," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 19(3), pages 557-587, August.
    4. Rabetino, Rodrigo & Kohtamäki, Marko & Gebauer, Heiko, 2017. "Strategy map of servitization," International Journal of Production Economics, Elsevier, vol. 192(C), pages 144-156.
    5. Santiago Velasquez & Petri Suomala & Marko Järvenpää, 2015. "Cost consciousness: conceptual development from a management accounting perspective," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 12(1), pages 55-86, April.
    6. Morris A. Cohen & Seungjin Whang, 1997. "Competing in Product and Service: A Product Life-Cycle Model," Management Science, INFORMS, vol. 43(4), pages 535-545, April.
    7. Teemu Laine & Tuomas Korhonen & Petri Suomala & Asta Rantamaa, 2016. "Boundary subjects and boundary objects in accounting fact construction and communication," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 13(3), pages 303-329, August.
    8. Persson, Andreas & Ryals, Lynette, 2014. "Making customer relationship decisions: Analytics v rules of thumb," Journal of Business Research, Elsevier, vol. 67(8), pages 1725-1732.
    9. Gebauer, Heiko & Fleisch, Elgar & Friedli, Thomas, 2005. "Overcoming the Service Paradox in Manufacturing Companies," European Management Journal, Elsevier, vol. 23(1), pages 14-26, February.
    10. Dekker, Rommert & Pinçe, Çerağ & Zuidwijk, Rob & Jalil, Muhammad Naiman, 2013. "On the use of installed base information for spare parts logistics: A review of ideas and industry practice," International Journal of Production Economics, Elsevier, vol. 143(2), pages 536-545.
    11. Huang, Chun-Yao, 2012. "To model, or not to model: Forecasting for customer prioritization," International Journal of Forecasting, Elsevier, vol. 28(2), pages 497-506.
    12. Hall, Matthew, 2010. "Accounting information and managerial work," Accounting, Organizations and Society, Elsevier, vol. 35(3), pages 301-315, April.
    13. Véronique Malleret, 2006. "Value Creation through Service Offers," Post-Print hal-00485754, HAL.
    14. Kari Lukka & Petri Suomala, 2014. "Relevant interventionist research: balancing three intellectual virtues," Accounting and Business Research, Taylor & Francis Journals, vol. 44(2), pages 204-220, April.
    15. Sergio Cavalieri & Paolo Gaiardelli & Stefano Ierace, 2007. "Aligning strategic profiles with operational metrics in after‐sales service," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 56(5/6), pages 436-455, June.
    16. Malleret, Véronique, 2006. "Value Creation through Service Offers," European Management Journal, Elsevier, vol. 24(1), pages 106-116, February.
    17. Wolfgang Ulaga & Werner Reinartz, 2011. "Hybrid Offerings: How Manufacturing Firms Combine Goods and Services Successfully," Post-Print hal-00642039, HAL.
    18. Goldstein, Daniel G. & Gigerenzer, Gerd, 2009. "Fast and frugal forecasting," International Journal of Forecasting, Elsevier, vol. 25(4), pages 760-772, October.
    19. Fader, Peter S. & Hardie, Bruce G.S., 2009. "Probability Models for Customer-Base Analysis," Journal of Interactive Marketing, Elsevier, vol. 23(1), pages 61-69.
    20. David C. Schmittlein & Donald G. Morrison & Richard Colombo, 1987. "Counting Your Customers: Who-Are They and What Will They Do Next?," Management Science, INFORMS, vol. 33(1), pages 1-24, January.
    21. Hall, Matthew, 2010. "Accounting information and managerial work," LSE Research Online Documents on Economics 28539, London School of Economics and Political Science, LSE Library.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Natalia Reen & Magnus Hellström & Kim Wikström & Olga Perminova-Harikoski, 2017. "Towards value-driven strategies in pricing IT solutions," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(1), pages 91-105, February.
    2. Gebauer, Heiko & Saul, Caroline Jennings & Haldimann, Mirella & Gustafsson, Anders, 2017. "Organizational capabilities for pay-per-use services in product-oriented companies," International Journal of Production Economics, Elsevier, vol. 192(C), pages 157-168.
    3. Rabetino, Rodrigo & Kohtamäki, Marko & Gebauer, Heiko, 2017. "Strategy map of servitization," International Journal of Production Economics, Elsevier, vol. 192(C), pages 144-156.
    4. Paiola, Marco & Saccani, Nicola & Perona, Marco & Gebauer, Heiko, 2013. "Moving from products to solutions: Strategic approaches for developing capabilities," European Management Journal, Elsevier, vol. 31(4), pages 390-409.
    5. Levente Szász & László Seer, 2018. "Towards an operations strategy model of servitization: the role of sustainability pressure," Operations Management Research, Springer, vol. 11(1), pages 51-66, June.
    6. Wim Coreynen & Arjen van Witteloostuijn & Johanna Vanderstraeten, 2021. "Toward Servitized Research: An Integrated Approach for Sustainable Product-Service Innovation," Sustainability, MDPI, vol. 13(15), pages 1-21, July.
    7. Shah, Syed Aamir Ali & Jajja, Muhammad Shakeel Sadiq & Chatha, Kamran Ali & Farooq, Sami, 2020. "Servitization and supply chain integration: An empirical analysis," International Journal of Production Economics, Elsevier, vol. 229(C).
    8. Gebauer, Heiko & Saul, Caroline, 2014. "Eine bibliometrische Analyse des Forschungsstandes und der zukünftigen Forschungsfragen für die Transformation vom Produzenten zum Dienstleister," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 68(4), pages 229-249.
    9. Huang, Chun-Yao, 2012. "To model, or not to model: Forecasting for customer prioritization," International Journal of Forecasting, Elsevier, vol. 28(2), pages 497-506.
    10. Tether, B. & Bascavusoglu-Moreau, E., 2012. "A Different Path to Growth? Service Innovation and Performance amongst UK Manufacturers," Working Papers wp433, Centre for Business Research, University of Cambridge.
    11. Mar’atus Sholihah & Tatsuru Maezono & Yuya Mitake & Yoshiki Shimomura, 2019. "PSS Strategic Alignment: Linking Service Transition Strategy with PSS Business Model," Sustainability, MDPI, vol. 11(22), pages 1-30, November.
    12. Dachs, Bernhard & Biege, Sabine & Borowiecki, Marcin & Lay, Gunther & Jäger, Angela & Schartinger, Doris, 2012. "The Servitization of European Manufacturing Industries," MPRA Paper 38873, University Library of Munich, Germany.
    13. Grover,Arti Goswami & Mattoo,Aaditya, 2021. "Why Do Manufacturing Firms Sell Services ? Evidence from India," Policy Research Working Paper Series 9701, The World Bank.
    14. Giuliani, Marco & Skoog, Matti, 2020. "Making sense of the temporal dimension of intellectual capital: A critical case study," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 70(C).
    15. Lee, Sunghee & Yoo, Shijin & Kim, Daeki, 2016. "When is servitization a profitable competitive strategy?," International Journal of Production Economics, Elsevier, vol. 173(C), pages 43-53.
    16. Reutterer, Thomas & Platzer, Michael & Schröder, Nadine, 2021. "Leveraging purchase regularity for predicting customer behavior the easy way," International Journal of Research in Marketing, Elsevier, vol. 38(1), pages 194-215.
    17. Valendin, Jan & Reutterer, Thomas & Platzer, Michael & Kalcher, Klaudius, 2022. "Customer base analysis with recurrent neural networks," International Journal of Research in Marketing, Elsevier, vol. 39(4), pages 988-1018.
    18. Mar’atus Sholihah & Tatsuru Maezono & Yuya Mitake & Yoshiki Shimomura, 2020. "Formulating Service-Oriented Strategies for Servitization of Manufacturing Companies," Sustainability, MDPI, vol. 12(22), pages 1-30, November.
    19. Gia Ninh Nguyen, 2024. "Servitization and Performance in Manufacturing Firms: The Mediating Role of Radicalness," Business Perspectives and Research, , vol. 12(4), pages 617-632, October.
    20. Kohtamäki, Marko & Einola, Suvi & Rabetino, Rodrigo, 2020. "Exploring servitization through the paradox lens: Coping practices in servitization," International Journal of Production Economics, Elsevier, vol. 226(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jmgtgv:v:24:y:2020:i:3:d:10.1007_s10997-018-9447-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.