Header

UZH-Logo

Maintenance Infos

ECO: Entega’s profitable new customer acquisition on online price comparison sites


Natter, Martin; Ozimec, Ana-Marija; Kim, Ju-Young (2015). ECO: Entega’s profitable new customer acquisition on online price comparison sites. Marketing Science, 34(6):789-803.

Abstract

Market liberalization of the German household electricity market has led to an excessive number of competitors (1,150 electricity providers) and volatile price dynamics on price comparison sites. To date, providers that are struggling to achieve a top ranking on price comparison sites do not appear to implement a consistent or elaborate strategy for attracting customers. We developed a pricing tool, E lectricity C ontract O ptimization (ECO), that addresses this highly competitive market situation by integrating various available data sources, such as data from price comparison sites, demographic data, and regional sales or cost data. ECO sets regionally varying one-time bonuses to attract new customers on price comparison sites with the goal of optimizing sales and profit targets or optimally allocating sales budgets. Based on two field experiments, we demonstrate that ECO’s optimization procedure reduces ENTEGA yearly sales costs for new customer business, on average, by 35% relative to previously used pricing heuristics. ENTEGA uses ECO monthly to analyze different scenarios or to set prices and one-time bonuses on price comparison sites.

Abstract

Market liberalization of the German household electricity market has led to an excessive number of competitors (1,150 electricity providers) and volatile price dynamics on price comparison sites. To date, providers that are struggling to achieve a top ranking on price comparison sites do not appear to implement a consistent or elaborate strategy for attracting customers. We developed a pricing tool, E lectricity C ontract O ptimization (ECO), that addresses this highly competitive market situation by integrating various available data sources, such as data from price comparison sites, demographic data, and regional sales or cost data. ECO sets regionally varying one-time bonuses to attract new customers on price comparison sites with the goal of optimizing sales and profit targets or optimally allocating sales budgets. Based on two field experiments, we demonstrate that ECO’s optimization procedure reduces ENTEGA yearly sales costs for new customer business, on average, by 35% relative to previously used pricing heuristics. ENTEGA uses ECO monthly to analyze different scenarios or to set prices and one-time bonuses on price comparison sites.

Statistics

Citations

Dimensions.ai Metrics
3 citations in Web of Science®
3 citations in Scopus®
3 citations in Microsoft Academic
Google Scholar™

Altmetrics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2015
Deposited On:09 Dec 2016 11:50
Last Modified:14 Feb 2018 11:29
Publisher:Informs - The Institute for Operations Research and the Management Sciences
ISSN:0732-2399
Additional Information:Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0943.
OA Status:Closed
Publisher DOI:https://doi.org/10.1287/mksc.2015.0943
Other Identification Number:merlin-id:14116

Download

Full text not available from this repository.
View at publisher

Get full-text in a library