Risk of Misinforming and Message Customization in Customer Relationship Management

By Christozov, Dimitar; Chukova, Stefanka et al. | Informing Science: the International Journal of an Emerging Transdiscipline, Annual 2015 | Go to article overview

Risk of Misinforming and Message Customization in Customer Relationship Management


Christozov, Dimitar, Chukova, Stefanka, Mateev, Plamen, Informing Science: the International Journal of an Emerging Transdiscipline


Introduction

"Half the money I spend on advertising is wasted; the trouble is I don't know which half" John Wanamaker (1838-1922)

Customer related management is an established practice allowing a company to relate directly to its customers by addressing them as independent individuals via maintaining customers' profiles. The current computer and communication technologies (CCT) provide tools that allow one to avoid sales mediators and also allow producers to collect the first-hand information related to end-users' attitude during the process of purchasing and acquiring a new product. CCT allows companies to customize their products so that any particular customer receives individualized targeted service. Regardless of the opportunities provided by CCT, the usual practice nowadays continuous to be to address all customers with a unified message. In this paper we consider the problem of seller generating customized messages to potential customers, based on their profiles, and offering personalized/group warranty aiming to encourage product trials and sales.

Customizing the message allows mitigation of the risk of wrong interpretation of the message by the customer within his or her problem domain. The risk of this wrong interpretation is the risk of misinforming. In this paper we distinguish these interpretations: (1) "informing", when a message developed by the sender is conveyed correctly and understood and interpreted correctly by the receiver in the way intended by the sender; (2) "disinforming", when the sender provides intentionally incorrect information aiming to mislead the receiver; and (3) "misinforming", when the sender's message consisting the correct and complete information is misunderstood and interpreted incorrectly by the receiver, which results in misinterpretation of the information.

The product warranty, offered by the seller/producer, could provide coverage for two types of hazards that the customer may encounter while purchasing and acquiring a new product. The first one is related to the malfunctioning of the product, i.e., the product does not function according to its specifications. In this case, the product is repaired or replaced with no charge to the customer. The second issue is related to customer's satisfaction, i.e., to what extent the product meets the customer's expectations to solve for her problems/tasks. In other words, to what extent, at the time of the purchase, the customer has been correctly informed regarding the product capability to solve her problems/tasks and to satisfy her needs. The warranty that provides coverage against the second issue is called "warranty of misinforming". If the customer is not "fully satisfied", the warranty of misinforming allows for the return of the product. The warranty of misinforming provides an opportunity for the customer to explore and learn more about the properties and features of the product without incurring any risk.

The risk of misinforming is caused by the information asymmetry between sellers and customers. The phenomenon of information asymmetry between two parties occurs when one of the parties has better understanding, that is, has broader and deeper knowledge on the subject of communication, than the other one. For example, a car dealer is an expert on the performance of his products and possesses complete information on all features and qualities of the product, such as reliability, performance, and purchase contract parameters. On the other hand, an average customer might be quite well informed about the product she is interested in buying, but her overall knowledge of the particular vehicle is, generally, limited compared to the knowledge of her counterpart in the sale/purchase process. Consider another example; assume that a customer purchases a new product, e.g., a new personal computer (PC). The purchase is made in order to address some particular needs and to perform for a particular set of the customer's tasks, e. …

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