Quid Pro Quo: Free Online Services in Exchange for User Data

florianvonwagenheimBy Dr. Florian v. Wangenheim

We all enjoy using Internet services for free: communities, news websites and other web services often do not charge their users. In order to survive, free sites depend on advertising revenues. These can be increased through behavioral targeting, in which the advertiser makes use of information that he has about the advertising recipient, such as demographics, current or past browsing or purchase behavior, information from preference surveys, or geographic information. However, privacy concerns are rising across the globe. They are present in discussions about the acquisition of WhatsApp as much as in the uproar about the data collected by the NSA and the GCHQ worldwide.

For free websites, this means the need to increase users’ acceptance of targeted advertising, The dominant strategy that can be seen virtually anywhere these days is to highlight how targeting increases the relevance of advertisements that people see (e.g., “By bringing content and advertising to you that is relevant and tailored to your interests, Yahoo! provides a more compelling online experience”; Yahoo 2013).

In our current article in the Journal of Marketing, “Targeted Online Advertising: Using Reciprocity Appeals to Increase Acceptance Among Users of Free Web Services”, we report the results of one scenario experiment and two field studies, in which we show that appealing to reciprocity instead of relevance is generally more effective. Hence, websites should simply let their visitors know that without using the user’s data, they will not be able to maintain their free offerings. In our field experiment involving close to seven million website visitors, we found that for the vast majority of websites, the reciprocity appeal is more effective. Only in some cases, when perceived website utility is low and level of user-generated content is high, relevance arguments work better.

We conclude that managers of free websites should remind their users of the free services they enjoy when asking for permission to target them online or to use their personal information. More generally, our study shows that consumers nowadays expect more openness from their service providers. When they feel that the service providers openly explain how their offering is financed, the level of agreement to the usage of personal data is much higher.

Dr. Florian v. Wangenheim is Professor of Technology Marketing, Department of Management, Technology, and Economics, ETH Zürich. His main research fields are technology-intensive service management and value-based customer management. In his research, he collaborates with companies such as BMW, Sevenonemedia, Hilti, Ebay, Lufthansa and many more.

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Providing a #WinningExperience for the Digital Customer


By Bobbi Dangerfield


Michael Dell, said it best: “We’re a company with big ears” – a good thing considering there are more than 25,000 online conversations about Dell each day in English. While that number can be overwhelming, it underscores the wonderful opportunity social media offers for companies to listen, engage, and ultimately understand customers more than ever before. Here are some tips and tricks we’ve learned at Dell that you can use to help provide a #winningexperience for your digital customers.

1. Go where your customers are – Dell interacts with customers on a variety of social media platforms around the globe like Twitter, Facebook, LinkedIn, Sina Weibo, RenRen, QQ, Google+ and more. In fact, combined with Dell forums, Tech Center and Direct2Dell, we have more than 21 million social customer connections. We’ve learned early on our customers are as diverse as the platforms they choose to spend their time on. Continue reading

Interview with Dr. Doug Olsen, Faculty Director of Services Leadership Institute

Doug OlsenIn preparation for the 28th annual Services Leadership Institute (SLI), March 24-26th  2014, we sat down with Doug Olsen, SLI Faculty Director and Associate Professor of Marketing at W.P. Carey School of Business, ASU, to talk about some of the highlights of this year’s program.

Q. This year marks the 28th offering of the Service Leadership Institute. I would imagine that some of the key issues have changed considerably over this time.
A. This is unquestionably true. Initially the goal was to realize some of the fundamentals regarding what steps it takes to create service excellence and SLI was at the vanguard of this movement. While we still make sure that this base is covered, over time some of the issues critical to professional service have evolved considerably and the sessions have advanced to reflect this. Continue reading

Changing Customer Behavior- Is it possible?

Per KristenssonBy: Per Kristensson

During the past decade, customers have displayed overwhelmingly positive attitudes toward environmentally-friendly offerings. However, their actual behavior does not mirror these attitudes. Do you think it would be possible to change customer behavior to make them greener?

In a market research study carried out in the U.S., 67% of surveyed respondents claimed they were considering a shift toward buying more eco-labeled offerings. In a similar study from Sweden, nearly half of the respondents claimed they thought eco-labeled products were important. These attitudes were reported to be fairly similar across the European Union (EU).

However, as consistently found in years of studies in social psychology, attitudes are a poor predictor of actual (market) behavior. For example, in the EU the actual purchases of environmentally-friendly offerings are approximately 2%. Similarly, sustainable initiatives like eco-labeled products and services often show disappointing market shares of approximately 1%. This means customers’ positive attitudes toward environmentally-friendly offerings are not translating into corresponding behaviors. The question is: Would it be possible to close this gap and shift customer behavior toward sustainability? Continue reading

Human Resources: Strategic Partner for Services

By Bob Giacometti

Traditionally, the role of Personnel, as Human Resources (HR) was once known, centered more on administrative and support activities such as hiring and transferring, maintaining employee records, and administering appraisal, compensation, benefits, equal opportunity, and other employee relations programs. While important, many HR teams still operate outside of the strategic planning process and business operations.

As more products became commoditized, shrinking profit margins, many companies such as Avnet, Dell, DuPont, EMC2, HP, IBM, Johnson & Johnson, Motorola, Oracle, Siemens, Xerox and others, began offering fee-based services and client solutions for growth and higher profits. Working with these and other clients, The INSIGHT Group developed unique perspectives on the cultural, organizational, and business process changes required for success in services – along with a more active role for HR – a role integrated with the strategic and operational fabric of the services business. This blog post shares highlights from The INSIGHT Group’s White Paper that explores this new strategic partner role for HR. Continue reading

Bringing Brands to Life

Sirianni_NancyBy Nancy J. Sirianni

     Brands are created by companies, but it’s the end customer who ultimately determines what the brand means to them. So, how do customers come to truly understand a brand and what it stands for?

Service brands are experienced on a personal level, with employees engaging customers during one-to-one social encounters, but many firms fail to include employee-customer interactions in their brand strategies. Because human-delivered services are performances and can vary from employee to employee, firms can find it difficult to create coherent experiences that drive home their brand imagery in a consistent manner from customer to customer.

For several years, I was part of a research team at Arizona State University that explored what brand managers can do to overcome this challenge. Through a series of consumer behavior experiments and a large-scale critical incident study that included dozens of service industries, we tested how customer brand experiences can be made more consistent through the behavior of frontline service employees. That is, we examined how service firms can recruit and train employees to internalize brand imagery in order to authentically bring the brand to life with customers in what we call “branded service encounters.” Continue reading