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Managing your customer’s tariff choice: what to do when your customers pay too much

Lambrecht, Anja and Skiera, Bernd 2009, Managing your customer’s tariff choice: what to do when your customers pay too much, GfK marketing intelligence review, vol. 1, no. 1, pp. 16-23, doi: 10.2478/gfkmir-2014-0081.

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Title Managing your customer’s tariff choice: what to do when your customers pay too much
Author(s) Lambrecht, Anja
Skiera, Bernd
Journal name GfK marketing intelligence review
Volume number 1
Issue number 1
Start page 16
End page 23
Total pages 8
Publisher De Gruyter Open
Place of publication Warsaw, Pol.
Publication date 2009-05
ISSN 0021-3985
Summary Telecommunications companies traditionally offer several tariffs from which their customers can choose the tariff that best suits their preferences. Yet, customers sometimes make choices that are not optimal for them because they do not minimize their bill for a certain usage amount. We show in this paper that companies should be very concerned about choices in which customers pick tariffs that are too small for them because they lead to a significant increase in customers churn. In contrast, this is not the case if customers choose tariffs that are too big for them. The reason is that in particular flat-rates provide customers with the additional benefit that they guarantee a constant bill amount that consumption can be enjoyed more freely because all costs are already accounted for.
Notes The article is adapted with permission from the Journal of Marketing Research published by the American Marketing Association: Lambrecht, A. and Skiera, B. (2006), “Paying Too Much and Being Happy About It: Existence, Causes and Consequences of Tariff-Choice Biases”, Vol. XLIII (May 2006), 212–23.
Language eng
DOI 10.2478/gfkmir-2014-0081
Field of Research 1505 Marketing
Socio Economic Objective 970115 Expanding Knowledge in Commerce
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2014, The Authors
Free to Read? Yes
Use Rights Creative Commons Attribution Non-Commercial No-Derivatives licence
Persistent URL http://hdl.handle.net/10536/DRO/DU:30091436

Document type: Journal Article
Collections: Open Access Collection
Department of Marketing
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Every reasonable effort has been made to ensure that permission has been obtained for items included in DRO. If you believe that your rights have been infringed by this repository, please contact drosupport@deakin.edu.au.