A ‘habit’ is defined as a person’s psychological disposition to repeat past behavior. About 45% of daily human behavior can be deemed habitual and prone to repetition. In the context of marketing, onset of customer habits has known to have substantive implications on firm performance. In this chapter, the authors have a detailed discussion on what, how and why different habits may be formed by customers as they repetitively transact with a firm. The authors synthesize extant research to find that not only do customers develop different types of habitual behaviors but also the rate of habit formation varies significantly for each customer of a firm. Consequently, a framework is proposed to exploit customer-level differences in habit formation and hence optimally manage customer profits through implementation of customer-centric marketing for firms. The chapter concludes with a discussion of three important areas for future research.
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