The role of customer experience dimensions in expanding customer–firm relationships: A customer expansion journey approach

• The customer expansion journey is a dynamic, multifaceted trajectory involving variations in direction (upward vs. downward) and rate (fast vs. slow). • Hidden Markov Model is developed to capture the customer expansion journey. • Customer expansion states can be basic, intensified, widened, and supreme. • Customer experience dimensions play different roles alongside the expansion journey. Expansion of customer–firm relationships has become crucial for firms to ensure survival and growth. However, siloed management of multiple expansion behaviors represents the dominant approach in academic research and business practice. This study advocates an expansion as a journey approach, where the customer expansion process is modeled through a customer expansion journey comprising a number of states that can be inferred from customer expansion behavioral manifestations and that represent varying intensities in the interdependencies and ties between the customer and the firm. In addition, we adopt a multidimensional view of the customer experience and investigate the roles of the various experience dimensions (i.e., recency, peak, trend, and fluctuation) in determining consumers’ upward and downward movements along the expansion journey at different rates. Using a uniquely rich dataset in the Spanish telecom market for a representative sample of 12,496 customers over four years, and applying advanced hidden Markov modeling techniques, we provide an empirical illustration of the proposed framework. We derive novel theoretical and practical insights into the multifaceted and dynamic customer expansion process, its underlying states, and the role of customer experience dimensions in the transitions across states.