Determinants of Customers' Responses to Customized Offers: Conceptual Framework and Research Propositions

Determinants of Customers' Responses to Customized Offers: Conceptual Framework and Research Propositions

2003Working Paper No. 1794

Over the past decade, marketers have been challenged by proponents of individual marketing (e.g., one-to-one marketing, mass customization, personalization) to shift from a focus on market segments to making individually customized offers. Specifically, marketers should develop learning relationships with their customers, be able to predict the customers wants, and tailor their offerings to those preferences. Building on current knowledge regarding the manner in which customer preferences are constructed, the present research examines the basic premise of these new approaches and, specifically, the manner in which customers evaluate and respond to offers that are customized to their wants. A conceptual framework and a series of research propositions are presented regarding key determinants of customers responses to customized offers, including (a) the characteristics of customers preferences, (b) cues provided by the offer regarding its fit with the customers preferences, (c) customers receptivity to offers seen as customized to their preferences, and (d) the specific customized offers content and format. The theoretical and practical implications of the framework and research propositions are discussed.