Return on Strategy-Customer Alignment

Download This Paper Open PDF in Browser Add Paper to My Library Share: Permalink Using these links will ensure access to this page indefinitely Copy URL Return On Strategy-Customer Alignment 58 Pages Posted: 27 Jul 2022 See all articles by Narendra BosukondaNarendra BosukondaTexas A&M University (TAMU), Mays Business School, Business Administration - MarketingSonam SinghAlvarez College of Business, University of Texas at San AntonioShrihari SridharTexas A&M University - Department of MarketingVikas MittalRice UniversityAshwin MalsheESSEC Business School - Marketing Department Date Written: June 24, 2022 Abstract A common belief among academicians and practitioners is that a company’s strategy should be aligned with its customers' value drivers to deliver superior financial performance. Yet, extant literature lacks 1) an objective measure of strategy-customer alignment, 2) empirical research linking strategy-customer alignment and objective financial performance 3) an understanding of how strategy-customer alignment affects senior executives’ attitudes and behaviors. We define strategy-customer alignment to capture four types of alignment between a company’s business strategy scope and its customer value drivers. In Study 1, we combine data from 17,251 customer surveys of 127 publicly traded companies to estimate customer value drivers and deep learning of text from annual 10-K filings to estimate business strategy scope. These are used to measure strategy-customer alignment at the company-year level. A 10% increase in strategy-customer alignment: (1) increases revenues by 25%, (2) reduces the cost of selling by 20%, and (3) increases gross profits by 18%. In Study 2 we measure strategy-customer alignment for five private companies. We combine 152 surveys of senior executives to measure strategy scope and 1,122 customer surveys to estimate customer value drivers. Results show an increase in strategy-customer alignment reduces senior executives’ coordination costs and increases their perceived effectiveness of accountability metrics. Keywords: marketing strategy effectiveness, customer value drivers, customer satisfaction, natural language processing, financial performance JEL Classification: M31, L1, L25 Suggested Citation: Suggested Citation Bosukonda, Narendra and Singh, Sonam and Sridhar, Shrihari and Mittal, Vikas and Malshe, Ashwin, Return On Strategy-Customer Alignment (June 24, 2022). Available at SSRN: https://ssrn.com/abstract=4145954 Narendra Bosukonda (Contact Author) Texas A&M University (TAMU), Mays Business School, Business Administration - Marketing ( email ) Sonam Singh Alvarez College of Business, University of Texas at San Antonio ( email ) Shrihari Sridhar Texas A&M University - Department of Marketing ( email ) 430 WehnerCollege Station, TX 77843-4218United States HOME PAGE: http://mays.tamu.edu/directory/shriharisridhar/ Vikas Mittal Rice University ( email ) 6100 South Main Street250 McNairHouston, TX 77005-1892United States Ashwin Malshe ESSEC Business School - Marketing Department ( email ) France Download This Paper Open PDF in Browser Do you have a job opening that you would like to promote on SSRN? 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