My Journey Toward Making a Real Impact on Business
By Yuping Liu-Thompkins
Academics live in an ivory tower, or so people say. I can see why this may be the case. After all, impartiality and abstraction are two often-needed qualities in academia. But as a business professor, I have always felt that our job should be more than building beautiful little theories in the ivory tower. We need to also make a real impact on the business world.
I remember attending the American Marketing Association’s Doctoral Consortium during my last year as a doctoral student. That’s when I first heard the “golden triangle” of theoretical rigor, sound methodology, and practical importance, the best combination for research. That presentation had a profound influence on my research philosophy. Ever since then, before taking on a research project, I would always ask myself if a marketing manager would even be remotely interested in what I may find from the project.
After joining Old Dominion University, my first encounter with a business did not come from research, however. It was a class project my Internet marketing students did for William E. Wood, a large real estate company in the Hampton Roads area. The company needed an assessment of the usability of its Web site at the time. My wonderful group of students took on the task and applied the protocol analysis technique they had learned in class. The results were concrete and useful suggestions to the company on how its Web site could be improved. A few months later, the Web site went through a major overhaul, and many of the suggestions my students made were incorporated into the new design. It was very rewarding for my students and me to see the impact we made. It doesn’t hurt either when William E. Wood later became a corporate partner with my college through the Constant Hall Partners Program. Since then, similar collaboration has happened between my classes and local businesses, and the organizations we have helped include the American Red Cross, Sentara Healthcare, Norfolk Florist and Azar’s restaurants and markets, to name just a few.
Show Me the Money
While the wonderful feeling of accomplishment was great, for many, it is perhaps not enough. Let’s be honest, as faculty members, we are judged mainly by our teaching and research. Although service to the community is included as a part of our evaluations, it can only carry us so far. Life often has its own interesting turns, however, and in the long run, what we do in life sometimes creates a synergy that we may not have foreseen along the way. During my second year at ODU, I encountered a business that would start an important stream of research for me – Outsite Networks, a provider of loyalty program equipment and services in the retail industry. Still a relatively new startup at the time, this southeastern Virginia company consisted mainly of engineers, and it wanted help from someone with a business background. The company founder’s search on the Internet landed him on my Web site, and my interest in both technology and business caught his attention. After our initial conversation, I realized that the company was sitting on a gold mine of data. Although they realized the potential of the data, at the time they did not quite know what to do with them, the typical D.R.I.P. (data-rich and information-poor) problem.
This initial conversation turned into a research grant for me to study interactive/personalized marketing and eventually evolved into a stream of research on customer loyalty. My first project utilizing the company’s data dealt with the fundamental business question of whether a loyalty program really works and how it affects consumers’ purchase behavior. My analysis showed that rewarding consumers through a loyalty program increased their purchase frequency, transaction size and overall loyalty toward the store. Surprisingly, contrary to the fundamental premise of a loyalty program (to reward the best customers) and the 80/20 rule, my results showed that the loyalty program had the biggest impact on light buyers, more so than moderate and heavy buyers. This is surprising because light buyers would usually find it hard to reach a reward in a loyalty program and as a result should be less interested in the program. But digging a little deeper into the data revealed consumers’ creativity and just how much they like a challenge; light buyers expanded their areas of business with the company and grew from single category buyers to multiple-category buyers. This research was later published in Journal of Marketing, a top-tier marketing journal that especially emphasizes relevance to marketing practice.
Following this project, I added competitive dynamics into the equation and looked at whether loyalty programs really create a zero-sum game when every business in the marketplace offers them. This was a question of concern for Outsite Networks because it was initially offering exclusive rights to their client retailers in the clients’ respective geographic areas, but expanding the business in the future could mean non-exclusivity and potential dilution of loyalty program impact. My analysis showed that while this may be the case sometimes, whether dilution really happens is determined by the expandability of the product category. For industries that have flexible demand (e.g., air travel), multiple loyalty programs can ecologically co-exist without erasing the gains for one another, either by encouraging consumers to consume more (e.g., traveling more) or by displacing demand in other industries (e.g., flying instead of driving). In the meantime, my findings showed that companies with bigger market shares do gain more from their loyalty programs than those with smaller market shares. This research also ended up being published in Journal of Marketing.
Currently I am working on two other projects in this area, one dealing with the financial liabilities associated with unredeemed points in a loyalty program and the other one having to do with differentiating loyal vs. habitual buyers using loyalty program data and utilizing that information to personalize customer offers. This stream of research has been very exciting for me. Not only did it allow me to answer some really important practical questions and impact real business, but it also opened up doors for me in other areas. For example, it has led to interest from the international company ConAgra Foods, in potential research collaboration as well as invited visits to Hong Kong Polytechnic University and Maastricht University in the Netherlands as a visiting professor. These visits and further talks with the industry enriched my perspective as a researcher and further increased my fascination with the business wonderland.
Here Comes the Geek
By now, you may or may not have sensed that I am a geek with a passion for numbers and technology. My doctoral dissertation had been on the interactive nature of the Internet and how it affects consumers. The recent emergence of social media rekindled my interest in this area. Similar to the effect open-source community has had on corporate research and development, social media has definitely opened up the boundary of organizations. The marketing, public relations and customer service functions of a company are no longer limited to its marketing or PR departments. Rather, members of the public such as bloggers, brand advocates and other consumers are all playing an increasingly important role. Get Satisfaction (http://getsatisfaction.com/) provides an example. By organizing consumers and companies all in one community, it allows the customer service function to be fulfilled jointly by companies and their customers.
These major changes in the business world present very interesting research questions. For instance, a major challenge in social media marketing is the difficulty in pinning down its return on investment (ROI). For example, involving consumers via social networks may require a significant amount of effort, but may not always turn into measurable business gains (if we even know what to measure). Marketing scholars have accumulated quite a bit of knowledge on the ROI of marketing activities in the last few years, and this knowledge can help businesses solve this important problem. But at this changing time, academia has trailed significantly behind. Perhaps we academics are being cautious and not chasing after fads like businesses do; or the long academic journal review process throws up an impediment. Whatever the reason might be, we have seen very little published academic research on social media marketing. This situation is quite unfortunate. Whether social media turns out to be real or a fad (I personally believe it is here to stay!), we academics should have been thought leaders at the frontline. Equipped with all the knowledge and tools, we have much to contribute. But due to a significant disconnect between research and practice, we have trailed behind.
These thoughts eventually led to the repositioning of my blog Ping! (http://www.yupingliu.com/wordpress/). As I said in the reintroduction of the blog, “what I intend to do is to discuss cutting-edge marketing and psychology research and its implications for marketing practice, and at the same time bring new trends, questions, and thinking from the practical world back into the academia.” In my blog, I describe scholarly marketing research in plain terms and talk about how the findings may be applied to practice. I also talk about interesting business practices that deserve more attention from academics. As a companion to the blog, I also started my professional Twitter account @PingTweets (http://twitter.com/PingTweets). Through this real-time short messaging service, I have been able to engage in productive interaction with practitioners as well as academics around the world.
I have friends and colleagues who have asked me why I spend so much time on all this because the current reward system in academia does not necessarily justify the effort. My answer is simple: do we really feel good spending our whole life passionately researching something and only have a few fellow Ph.D.s appreciate it? I know I wouldn’t. While life inside the ivory tower may be comfortable (especially after one obtains tenure), I think the world outside is too exciting to shut out. As they say, when we step out of our comfort zone, that’s when we can challenge ourselves and grow to a whole new level. If we all do that, our discipline will advance in leaps and bounds, and we will again be admired as thought leaders by the many practitioners out there in the field.
(Yuping Liu-Thompkins is an associate professor of marketing and the E.V. Williams Faculty Fellow in the College of Business and Public Administration at ODU. In January 2010 she was named a Fellow of the Society for New Communications Research, a global research and education foundation and think thank focused on the latest developments in media and communications. She received her Ph.D. in management with a marketing concentration from Rutgers University in 2002 and joined ODU that same year. Her research focuses on the intersection among marketing, technology and consumer psychology. Her publications have appeared in Journal of Marketing, Journal of Advertising, Journal of Advertising Research and Business Horizons, among others.)