After the Harvest
Comes the Fallow Phase
Brand Equity as the Agent for Customer Renewal
and Retention in Professional Services
By Roger Sinclair
This paper was presented at the June 2003 American Marketing Association
(AMA) Research In Services Conference in Reims, France.
Why do clients who have expressed satisfaction at the conclusion of a
service encounter too frequently appoint an alternative service provider
when next they have a need for the service? In the author’s work over
a decade with various professions, this behavior has been regularly
observed in conditions of discrete consumption of the service. For
example, an architect whose client expressed complete satisfaction on
completion of a project is surprised to find the next project given to a
competitor.
When the service is continuous, as it would be with a firm of
auditors working for a major corporation, should the relationship
be ended by either party, the break will be deliberate and formally
announced. Often the firm that believes it is the incumbent in a
relationship, which requires an appointment for each project, learns
that it has not been appointed for new work only when it sees another
name on the project board.
The danger period for this to occur is in the interregnum
between service completion and new problem recognition. During this
time — which we call the Fallow Phase — clients are susceptible and are
exposed to a battery of communications and signals that prime them for
the alternative evaluation that lies ahead. We propose that the longer
the Fallow Phase, the greater the danger to the incumbent.
This article outlines the problem and suggests that professional
firms should adopt the principles of brand equity management and
maintenance to vitiate the dangers implicit in the Fallow Phase.
Examples will be given and suggestions made as to future research
that could provide management with guidance in creating greater and
more enduring client loyalty to their professional brand.
Introduction
This paper draws the attention of service marketers to an aspect
of customer retention that has received insufficient attention from
academics and researchers in the field. It concerns, primarily, those
services where consumption consists of discrete transactions rather
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than continuous delivery (Lovelock 1983). The particular area of focus is
professional services.
The area of danger for a service firm is the time that elapses
between completion of the service encounter and when problem
recognition prompts renewed search, evaluation, and re-appointment.
That period is not a cognitive and affect void in which previously
developed memories, opinions, and levels of satisfaction hibernate.
Researchers have shown that we constantly absorb messages through
word of mouth, marketer controlled communications, and personal
experience (Bayus 1985; Zeithaml, Berry & Parasuraman 1993).
Consumers learn about alternatives through a process of rehearsal and
elaboration (Engel, Blackwell & Miniard 1995).
During — or even before — this Fallow Phase period, consumers
are quite likely to learn of alternative service suppliers and store that
knowledge away in long-term memory for future use. They might hear
of a new firm of bright, young architects, or a hairdresser who did a
particularly good job on a friend or relative’s hair. They might, when the
need next arises, despite their previously expressed satisfaction, decide
to “give the new firm a go” (see section 2).
This smacks of the switching behavior of consumers who will shift
between brands within an established portfolio for such reasons as
pricing, inconvenience, a better product, and service encounter failures
(Keaveney 1995; Kumar 2002).
Based upon insights from real-world case studies in professional
services — some of which will be covered here — it can be hypothesized
that there is a negative correlation between time elapsed from service
encounter completion and level of commitment to repeat. This reducing
level of commitment makes the client increasingly susceptible to
suggestions from alternatives of improved or more convenient services.
Moments of dissatisfaction that, during the encounter, would have
been perceived as minor in the context of the client’s global evaluation,
now assume greater significance and importance (see the later section
“Insights from Brand Equity Research”).
 In the study covered by this abstract, we highlight this interregnum
and suggest that one approach to minimizing the threat it poses is to use
the tools emerging from the relatively new area of brand equity study
(see “Brand Equity Signals Continuity”).
Customer Defection and Retention
Lovelock & Wright (2002:88) present a model of the purchase process
for services. It has three main stages: the pre-purchase stage when a
need is recognized and alternatives evaluated, followed by the service
encounter stage when the service is utilized, and ending with the post-
purchase stage when satisfaction and dissatisfaction are evaluated and
future intentions are established. The Fallow Phase is the interregnum
between post-purchase and the next pre-purchase round.
The value of retention and of reducing defections is well
documented (e.g., Reichheld 1996). Much emphasis is placed on the
service encounter to ensure that the customer exits the relationship
in a satisfied frame of mind, and that the perception of service quality
matches or exceeds expectations (Zeithaml et al 1993). It is implied that
switching decisions take place during the service encounter or at the
post-encounter evaluation phase (Keaveney 1995; Ganesh et al 2000).
However, if the service provider decides to end the relationship, this will
typically take place during the Fallow Phase (Halinen & Tähtinen 2002) .
Equally, if a customer who gave every indication of being satisfied
when emerging from the previous encounter decides not to use the
service again when the need next arises, this decision will probably take
place during the Fallow Phase. The disturbing aspect of this decision is
that the service provider may never know that the satisfied customer
has gone elsewhere, or may learn when it is too late. It might also be so
that in some circumstances the longer the relationship, the more likely
this is to happen (e.g., Grayson & Ambler 1999).
Service As a Cycle
Service firms gain well-documented benefits from loyal customers who
enter into long-term relationships with the firm. Gwinner, Gremler &
Bitner (1998:101) describe the most commonly cited of these benefits
as increased revenues through resistance to competitive offers and
willingness to pay a premium price; more predictable sales and profit
streams; additional sales through loyal customers buying additional
goods and services; and referral business through positive word-of-
mouth recommendations.
Long-term relationships also reduce customer turnover and
can lower costs of customer acquisition and cost to service because
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marketing, sales, and setup costs are amortized over longer periods of
time (see Lovelock & Wright 2002:106 for a summary of these benefits).
Morgan & Hunt (1994) propose that relationships between service
providers and customers (that result in these benefits) are based
on commitment and trust. Garbarino & Johnson (1999) have shown
that satisfaction has a variable impact on overall future intentions
and contributes to trust under certain conditions. These are some
examples of a rich body of study into the service industry and the
nature of the customer relationship (e.g., Jackson 1985; Zeithaml; Berry
& Parasuraman 1993; Berry 1995).
Notwithstanding this rich stream of research into how service
providers should build long-term relationships, customers continue
consciously to defect. Keaveney (1995) examined switching behavior and
identified eight main reasons for this.
More recently, Ganesh, Arnold, and Reynolds (2000:65) made the
point that “some of the most satisfied customers might (still) switch for
reasons beyond the control of the firm and at times even beyond the
control of the consumer.”
Halinen & Tähtilen (2000:167) propose that relationships end
because the actors either jointly or independently chose to end it — it
is forced on the actors, or it occurs naturally. This assumes some
transaction, negotiation, or communication in bringing the relationship
to an end. What is not covered in their intensive study is the relationship
that simply dissolves without comment, explanation, or apparent cause.
Insights from Brand Equity Research
The idea of a recognized Fallow Phase as part of the full service cycle
implies that there should not be a separation between brand-centered
and customer-centered marketing as suggested by, for example, Bell,
Deighton, Reinartz, Rust & Swartz (2002). The brand is the valuable
asset but it is the customer, through repeat usage, who endows it with
its future economic benefits.
Brand equity emerged at the end of the 1980s as the result of a
challenge mounted by the finance community which threatened to take
ownership of brands as Merger and Acquisition assets. During the 1980s
firms bought other firms to gain control of their brands. This was thought
to be cheaper than new product development since major brands have
existing distribution, cash streams, awareness, and customer loyalty.
When brands started appearing on balance sheets (a practice that was
ultimately halted by the accounting profession) the marketing community
responded and, given impetus by the Marketing Science Institute (MSI),
brand equity became a core topic of research and operational application.
 Significantly, but not surprisingly, the benefits outlined above that
accrue to service marketers from building customer loyalty are the
same that are associated with strong brand equity (Dekimpe et al 1996;
Keller 1998).
The basis of brand equity, according to Keller (1998), is Brand
Knowledge Structure (BKS). Drawing on psychology and neuro-science,
Keller describes BKS in terms of the network memory model in which
nodes containing chunks of information are linked to other nodes which
connect when activated by some stimulus, such as a need.
BKS is conceptualized as comprising both brand awareness and
brand image. Awareness is the anchor node which responds to a need
such as thirst. Favored brands are those that have strong, favorable, and
unique associations that link to awareness when the need is activated.
Marketer-controlled sources of information and image should be
designed to build these associations. Brand management’s on-going
task is to maintain them at levels that support customer loyalty. Thus,
strong brand equity leads to greater future economic profit flows and
enhanced brand asset value.
While goods marketers are able to attach associations to the
memory of a physical good, service marketers have to create an image
around an experience, an act, or performance (Keller 1998:612). Strong,
favorable, and unique associations with high levels of both spontaneous
and prompted awareness in the service sector captured in the structure
of the service brand (BKS) is a powerful reminder of the service
experience and is a driver of repeat usage.
Brand Equity Signals Continuity
This paper argues that service marketers need to understand more fully
Brand Knowledge Structure as the source of brand equity (Keller 1998)
to ensure that brand equity built during the encounter is not eroded by
new knowledge and information during the Fallow Phase.
When consumers exit the encounter phase of a service cycle, they
are aware of the brand name of the service provider and associate
the name with several determining attributes. Their evaluation of
these attributes can be graded according to strength, favorability, and
uniqueness. If the ratings are high on each of these dimensions, the
consumer can be said to be satisfied, and the service provider is entitled
to assume that the consumer will return when the need next becomes
known. However, as has been pointed out earlier, hard-won brand
equity can be eroded by new knowledge and information during the
interregnum.
In professional relationships, firms entertain clients and even take
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them away for holidays. The value of this must be questioned because
it is quite probable, depending on the value of projects the client is able
to award, that competitors are neutralizing these tactics by taking similar
actions. The only controlled contact that a marketer can have with the
consumer during the Fallow Phase is through marketing communications.
Erdem & Swait (1998) have examined brand equity from the point
of view of signaling theory from information economics. They explain
a brand signal as comprising the firm’s past and present marketing mix
strategies. In the service sense, this would include the consumer’s past
experiences and the firm’s present communication to confirm the
evaluation of these experiences.
They conclude from their experiments that brand loyalty
emerges as a consequence of brand equity, not as an antecedent.
This is important in the context of this discussion because the brand
equity that is built up during the service encounter can be eroded
by intervening factors, thus destroying the concept of loyalty. They
also contend that informational aspects in the market affect brand
preference. “As signals of product positions, brands may credibly
inform consumers about product (service) attributes.” (Erdem & Swait
1998:152)
Strategic Implications
The tendency to ignore clients once they have departed from the
encounter is endemic to many service businesses that are characterized,
primarily, by continuous delivery. These firms should design programs
that achieve at the very least the following overall Fallow Phase
objectives:
• Maintain high levels of service brand awareness among clients
who are in the Fallow Phase, and confirm the positive determining
associations that are critical to the client’s selection process.
• Attempt to approach potential new business while the target is in
the Fallow Phase.
• Reduce the perceived attraction of individuals within the firm in
favor of a positive disposition to the service brand itself.
Future Research Needs
The Fallow Phase theory presents a rich area for new research, in
particular these four propositions:
• Customers are more susceptible to persuasive competitive
messages during the Fallow Phase than they are during the service
encounter.
• Commitment to re-use (of a service provider) decreases
 exponentially as the distance from the encounter exit increases.
• Most retention and switching decisions will be determined during
the Fallow Phase.
• During the Fallow Phase, commitment to a professional service
brand is more sustainable than loyalty to individuals within the
brand’s environment.
Conclusion
The Fallow Phase represents a dangerous stage in the service cycle
because consumers who, at the conclusion of the service encounter
were thought to be loyal, might subsequently learn information about
service alternatives. This new information might surface when the need
for the service next arises prompting the consumer to re-evaluate the
service provider and perhaps select a competitor. The incumbent firm
might not even know that the business has been lost.
Brand equity theory models the consumer’s knowledge structure
(BKS) and attempts to underpin projected long-term cash flows from
customers by constantly testing and monitoring this crucial source and
managing it to ensure repeat usage.
By adopting the newly emerged theory of brand equity, service
providers might have available a structured approach to minimizing the
apparently enigmatic loss of satisfied customers during the Fallow Phase.
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Dr. Roger Sinclair is an Academic Partner of Prophet and consults exclusively
for our clients. He is the originator of the globally respected BrandMetrics
valuation methodology — one of the world’s most fascinating and useful
measures of a brand’s worth. Prophet (www.prophet.com) is a global
consultancy that helps senior executives more effectively use branding,
marketing, innovation, and design to drive profitable growth. Roger can be
reached at rsinclair@prophet.com.