Journal of Retailing 83 (1, 2007) 47–64

The WOW factor: Creating value through win-back

offers to reacquire lost customers
Mert Tokman a,∗ , Lenita M. Davis b,1 , Katherine N. Lemon c,2
a James Madison University, College of Business, Department of Marketing, MSC 0207, Harrisonburg, VA 22807, USA
b The University of Alabama, Culverhouse College of Commerce and Business Administration, Department of Management and Marketing,
132 Alston, Box 87225, Tuscaloosa, AL 35487, USA
c Boston College, Wallace E. Carroll School of Management, Department of Marketing, Fulton Hall 444,

140 Commonwealth Avenue, Chestnut Hill, MA 02467, USA

Abstract

Customer reacquisition provides firms with high financial and service improvement benefits. The implications of this research are meant to
stimulate a new research stream towards a theory of customer reacquisition management as well as to provide service firms with a framework to
regain defected customers. Through two studies, we develop an empirical model that identifies the factors driving win-back offer effectiveness.
The findings indicate that, in order for win-back offers to be effective, service providers must consider a customer’s reasons for leaving and
their relationships with the current service provider. Value determinants (price and service benefits provided in the win-back offer), social
capital and service importance play a prominent role in shaping customer switch-back intentions regardless of the level of previous satisfaction,
regret, or delight with the new service provider.
© 2006 New York University. Published by Elsevier Inc. All rights reserved.

Keywords: Customer reacquisition; Win-back offer worth; Customer relationship management

Introduction chase their clients and become successful at winning them

Customer relationship management (CRM) has been one
of the hottest catch phrases in marketing in the last decade
(Cohen and Moore 2000). CRM has emerged to support the
view that “developing a relationship with a customer is the
best way to get them to become loyal and loyal customers are
more profitable than non-loyal customers” (Dowling 2002, p.
87). Until recently, the attractiveness of CRM was attributed
to its capacity to enhance firms’ customer retention capa-
bilities (Rust et al. 1996). Nowadays, firms realize that 100
percent retention is a myth and regardless of the initiatives
taken for customer retention, customers leave (Dodson 2000).
Instead of calculating their losses and moving on, some firms
∗ Corresponding author. Tel.: +1 540 568 3254; fax: +1 540 568 3275.
E-mail addresses: mtokman@netzero.net (M. Tokman),
ldavis@cba.ua.edu (L.M. Davis), kay.lemon@bc.edu (K.N. Lemon).
1 Tel.: +1 205 348 2597; fax: +1 205 348 6698.
2 Tel.: +1 617 552 1647; fax: +1 617 552 6677.
back (Griffin 2001). For example, BellSouth had been los-
ing small-businesses at an alarming rate of 29,000 lines per
month in 2001. With aggressive customer win-back efforts,
BellSouth gained 26,000 previously lost lines per month in
the first half of 2003 (Caruso 2003). Consequently, a new per-
spective has emerged for firms that focus on CRM—namely,
“customer reacquisition”.
Stauss and Friege (1999) define customer reacquisition as
“rebuilding the relationship with customers who explicitly
quit the business relationship” (p. 348). Similar to Stauss
and Friege, Thomas et al. (2004) conceptualize customer
reacquisition as “the process of firms’ revitalizing rela-
tionships with customers who have defected” (p. 31). The
concept of “defected customers” refers to former customers
who are no longer active (Schmittlein et al. 1987; Reichheld
and Sasser 1990). This provides a clear distinction between
customer reacquisition and the long-established recruitment
and retention concepts. As Stauss and Friege (1999, p. 348)
convey “traditional recruitment is directed to prospects who

0022-4359/$ – see front matter © 2006 New York University. Published by Elsevier Inc. All rights reserved.
doi:10.1016/j.jretai.2006.10.005