• Title/Summary/Keyword: Customer segment

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A Methodology of Customer Churn Prediction based on Two-Dimensional Loyalty Segmentation (이차원 고객충성도 세그먼트 기반의 고객이탈예측 방법론)

  • Kim, Hyung Su;Hong, Seung Woo
    • Journal of Intelligence and Information Systems
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    • v.26 no.4
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    • pp.111-126
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    • 2020
  • Most industries have recently become aware of the importance of customer lifetime value as they are exposed to a competitive environment. As a result, preventing customers from churn is becoming a more important business issue than securing new customers. This is because maintaining churn customers is far more economical than securing new customers, and in fact, the acquisition cost of new customers is known to be five to six times higher than the maintenance cost of churn customers. Also, Companies that effectively prevent customer churn and improve customer retention rates are known to have a positive effect on not only increasing the company's profitability but also improving its brand image by improving customer satisfaction. Predicting customer churn, which had been conducted as a sub-research area for CRM, has recently become more important as a big data-based performance marketing theme due to the development of business machine learning technology. Until now, research on customer churn prediction has been carried out actively in such sectors as the mobile telecommunication industry, the financial industry, the distribution industry, and the game industry, which are highly competitive and urgent to manage churn. In addition, These churn prediction studies were focused on improving the performance of the churn prediction model itself, such as simply comparing the performance of various models, exploring features that are effective in forecasting departures, or developing new ensemble techniques, and were limited in terms of practical utilization because most studies considered the entire customer group as a group and developed a predictive model. As such, the main purpose of the existing related research was to improve the performance of the predictive model itself, and there was a relatively lack of research to improve the overall customer churn prediction process. In fact, customers in the business have different behavior characteristics due to heterogeneous transaction patterns, and the resulting churn rate is different, so it is unreasonable to assume the entire customer as a single customer group. Therefore, it is desirable to segment customers according to customer classification criteria, such as loyalty, and to operate an appropriate churn prediction model individually, in order to carry out effective customer churn predictions in heterogeneous industries. Of course, in some studies, there are studies in which customers are subdivided using clustering techniques and applied a churn prediction model for individual customer groups. Although this process of predicting churn can produce better predictions than a single predict model for the entire customer population, there is still room for improvement in that clustering is a mechanical, exploratory grouping technique that calculates distances based on inputs and does not reflect the strategic intent of an entity such as loyalties. This study proposes a segment-based customer departure prediction process (CCP/2DL: Customer Churn Prediction based on Two-Dimensional Loyalty segmentation) based on two-dimensional customer loyalty, assuming that successful customer churn management can be better done through improvements in the overall process than through the performance of the model itself. CCP/2DL is a series of churn prediction processes that segment two-way, quantitative and qualitative loyalty-based customer, conduct secondary grouping of customer segments according to churn patterns, and then independently apply heterogeneous churn prediction models for each churn pattern group. Performance comparisons were performed with the most commonly applied the General churn prediction process and the Clustering-based churn prediction process to assess the relative excellence of the proposed churn prediction process. The General churn prediction process used in this study refers to the process of predicting a single group of customers simply intended to be predicted as a machine learning model, using the most commonly used churn predicting method. And the Clustering-based churn prediction process is a method of first using clustering techniques to segment customers and implement a churn prediction model for each individual group. In cooperation with a global NGO, the proposed CCP/2DL performance showed better performance than other methodologies for predicting churn. This churn prediction process is not only effective in predicting churn, but can also be a strategic basis for obtaining a variety of customer observations and carrying out other related performance marketing activities.

Customer Classification Method for Household Appliances Industries with a Large Number of Incomplete Data (다수의 결측치가 존재하는 가전업 고객 데이터 활용을 위한 고객분류기법의 개발)

  • Chang, Young-Soon;Seo, Jong-Hyen
    • IE interfaces
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    • v.19 no.1
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    • pp.86-96
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    • 2006
  • Some customer data of manufacturing industries have a large number of incomplete data set due to the customer's infrequent purchasing behavior and the limitation of customer profile data gathered from sales representatives. So that, most sophisticated data analysis methods may not be applied directly. This paper proposes a heuristic data analysis method to classify customers in household appliances industries. The proposed PD (percent of difference) method can be used for the discriminant analysis of incomplete customer data with simple mathematical calculations. The method is composed of variable distribution estimation step, PD measure and cluster score evaluation steps, variable impact construction step, and segment assignment step. A real example is also presented.

Mixed Integer Linear Programming Model to Determine the Optimal Levels of Technical Attributes in QFD under Multi-Segment Market (다수의 마켓 세그먼트 하에서 품질기능전개 시(時) 기술특성들의 최적 값을 결정하기 위한 혼합정수계획모형)

  • Yang, Jae Young;Yoo, Jaewook
    • Korean Management Science Review
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    • v.33 no.2
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    • pp.75-87
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    • 2016
  • Quality function deployment (QFD) is a widely adopted customer-oriented product development methodology by analyzing customer requirements. It is a main activity in QFD planning process to determine the optimal values of the technical attributes (TAs) so as to achieve the customer requirements (CRs) from the House of Quality (HoQ). In most of the previous research, all the TAs in QFD are assumed to have either continuous or discrete values. In the real world applications, the continuous TAs and the discrete TAs are often mixed in QFD. In this paper, a mixed integer linear programming model is formulated to obtain the optimal values for the continuous TAs and the discrete TAs in QFD planning as well as Branch and Bound (B and B) algorithm is proposed as the solution approach. Finally, the proposed model and solution approach are illustrated with an office chair under multi-segment market, and the sensitivity analysis is performed to study how the proposed model and its solutions respond to the variation for the two elements which are budget and CRs' weights.

A Study on Family Restaurant Choice Attributors of Female Has Job (직장여성고객의 패밀리 레스토랑 선택속성에 관한 연구)

  • 이재련;송기옥
    • Culinary science and hospitality research
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    • v.9 no.3
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    • pp.22-36
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    • 2003
  • Women customer is one of main target of Family restaurant as known. In addition, they are powerful consumer group now days. According to the social variation, to expand to participation to career opportunity not only unmarried but also married women and increase to single female household make women more expend money and go out to eat. So, this study is examined family restaurant choice attributor of women customer depends on status of marriage, scale of household and age. It will be contributed to Family restaurant industry to segment of their women customer by neo-demographic variables be reflected with social variations.

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A Study on Customer Segmentation for Efficient Customer Management (효율적인 고객관리를 위한 고객 세분화에 관한 연구)

  • 양광모;김영준;강경식
    • Proceedings of the Safety Management and Science Conference
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    • 2002.11a
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    • pp.221-226
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    • 2002
  • The biggest difficulty the small and small business currently face is not to have the effective cusomer management system that is the computerization of management, And, CRM has mary problems that make companies confused. As the result, projects are being suspended and budgets cut, plans for introducing CRM suspended or cancelled and many CRM software vendors and technical consulting firms are facing serious management crisis. Yet, this phenomenon can be regarded as an interim one. In fact, some cases that successfully introduced CRM show that CRM is migrating from small scale which is typical when introduced to larger scale through various tests. Therefore, this study tries to segment customer for the sieving the problem. And it make efficient customer management.

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A Study on Customer Segmentation for CRM Analysis (CRM 분석을 위한 고객 세분화에 관한 연구)

  • 송관배;양광모;강경식
    • Journal of the Korea Safety Management & Science
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    • v.5 no.3
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    • pp.133-143
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    • 2003
  • Even in the present situation where any general criterion on CRM dose not exist, utilization of CRM is expected to be actively continued, which will cause many problems. In this regard, evaluating CRM counts. As the result, projects are being suspended and budgets cut, plans for introducing CRM suspended or cancelled and many CRM software vendors and technical consulting firms are facing serious management crisis. Yet, this phenomenon can be regarded as an interim one. In fact, some cases that successfully introduced CRM show that CRM is migrating from small scale which is typical when introduced to larger scale through various tests. Therefore, this study tries to segment customer for the sloving the problem. And it make efficient customer management. Using this model, SN ratio of taguchi method for each of subjective factors as well as values of weights are used in this comprehensive method for customer. A example is presented to illustrate the model and to show a rank reversal when compared to a model that does not eliminate extreme values and eliminates the highest and lowest experts' values allocating the weights and the subjective factors.

Establishment of Marketing Strategy for Online Shopping Mall through Customer Cluster Analysis (소비자 군집분석을 통한 온라인 쇼핑몰 마케팅 전략 수립)

  • Seonghye Kim;Joonsoo Bae
    • Journal of Korean Society of Industrial and Systems Engineering
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    • v.47 no.3
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    • pp.163-173
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    • 2024
  • This study aims to establish an online shopping mall marketing strategy based on big data analysis methods. The customer cluster analysis method was utilized to analyze customer purchase patterns and segment them into customer groups with similar characteristics. Data was collected from orders placed over one year in 2023 at 'Jeonbuk Saengsaeng Market', the official online shopping mall for agricultural, fish, and livestock products of Jeonbuk Special Self-Governing Province. K-means clustering was conducted by creating variables such as 'TotalPrice' and 'ElapsedDays' for analysis. The study identified four customer groups, and their main characteristics. Furthermore, regions corresponding to customer groups were analyzed using pivot tables. This facilitated the proposal of a marketing strategy tailored to each group's characteristics and the establishment of an efficient online shopping mall marketing strategy. This study is significant as it departs from the traditional reliance on the intuition of the person in charge to operate a shopping mall, instead establishing a shopping mall marketing strategy through objective and scientific big data analysis. The implementation of the marketing strategy outlined in this study is expected to enhance customer satisfaction and boost sales.

Patronage Orientations of Service Facilities and Clothing Purchase Behaviors: A Typology of Department Store Customer Segments (백화점 소비자의 서비스시설 이용성향과 의복구매행동: 시장세분화를 위한 유형 별 분석)

  • 신수임;박경애
    • Journal of the Korean Society of Clothing and Textiles
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    • v.24 no.4
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    • pp.571-582
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    • 2000
  • The purposes of this study were to segment department store customers based on patronage orientations of service facilities in a department store and to develop a profile of each segment using store visit behaviors, clothing purchase behaviors and demographics. A total of 453 responses collected from an on-site questionnaire survey to female department store customers was analyzed. Cluster analysis on patronage orientations of department store service facilities identified four groups including: Active patrons(27.3%); Comparison patrons(27.6%); Convenience seekers(27.3%); and Minimum patrons(17.8%). ANOVA and $\chi$$^2$ analyses revealed significant differences among the four groups on store visit behaviors(the extent of store visits and the extent of service facility visits), clothing purchase behaviors(6 store choice criteria and the extent of clothing purchase), and 5 demographic characteristics. The study developed a profile of each segment and provided marketing implications.

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Impact of Net-Based Customer Service on Firm Profits and Consumer Welfare (기업의 온라인 고객 서비스가 기업의 수익 및 고객의 후생에 미치는 영향에 관한 연구)

  • Kim, Eun-Jin;Lee, Byung-Tae
    • Asia pacific journal of information systems
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    • v.17 no.2
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    • pp.123-137
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    • 2007
  • The advent of the Internet and related Web technologies has created an easily accessible link between a firm and its customers, and has provided opportunities to a firm to use information technology to support supplementary after-sale services associated with a product or service. It has been widely recognized that supplementary services are an important source of customer value and of competitive advantage as the characteristics of the product itself. Many of these supplementary services are information-based and need not be co-located with the product, so more and more companies are delivering these services electronically. Net-based customer service, which is defined as an Internet-based computerized information system that delivers services to a customer, therefore, is the core infrastructure for supplementary service provision. The importance of net-based customer service in delivering supplementary after-sale services associated with product has been well documented. The strategic advantages of well-implemented net-based customer service are enhanced customer loyalty and higher lock-in of customers, and a resulting reduction in competition and the consequent increase in profits. However, not all customers utilize such net-based customer service. The digital divide is the phenomenon in our society that captures the observation that not all customers have equal access to computers. Socioeconomic factors such as race, gender, and education level are strongly related to Internet accessibility and ability to use. This is due to the differences in the ability to bear the cost of a computer, and the differences in self-efficacy in the use of a technology, among other reasons. This concept, applied to e-commerce, has been called the "e-commerce divide." High Internet penetration is not eradicating the digital divide and e-commerce divide as one would hope. Besides, to accommodate personalized support, a customer must often provide personal information to the firm. This personal information includes not only name and address, but also preferences information and perhaps valuation information. However, many recent studies show that consumers may not be willing to share information about themselves due to concerns about privacy online. Due to the e-commerce divide, and due to privacy and security concerns of the customer for sharing personal information with firms, limited numbers of customers adopt net-based customer service. The limited level of customer adoption of net-based customer service affects the firm profits and the customers' welfare. We use a game-theoretic model in which we model the net-based customer service system as a mechanism to enhance customers' loyalty. We model a market entry scenario where a firm (the incumbent) uses the net-based customer service system in inducing loyalty in its customer base. The firm sells one product through the traditional retailing channels and at a price set for these channels. Another firm (the entrant) enters the market, and having observed the price of the incumbent firm (and after deducing the loyalty levels in the customer base), chooses its price. The profits of the firms and the surplus of the two customers segments (the segment that utilizes net-based customer service and the segment that does not) are analyzed in the Stackelberg leader-follower model of competition between the firms. We find that an increase in adoption of net-based customer service by the customer base is not always desirable for firms. With low effectiveness in enhancing customer loyalty, firms prefer a high level of customer adoption of net-based customer service, because an increase in adoption rate decreases competition and increases profits. A firm in an industry where net-based customer service is highly effective loyalty mechanism, on the other hand, prefers a low level of adoption by customers.

The Effects of Experiential Value of on Customer Loyalty in Dessert Café of College Students: Focused on Moderating Effect of the Eating Out Consumption Patterns (대학생의 디저트카페에 대한 경험가치가 고객충성도에 미치는 영향: 외식소비성향의 조절효과를 중심으로)

  • Yoon, Hee-Souk
    • Culinary science and hospitality research
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    • v.24 no.1
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    • pp.82-95
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    • 2018
  • The purpose of this study is to investigate the relationship between experiential value, customer loyalty and eating out tendency of dessert $caf{\acute{e}}$ in college students. This survey was conducted for college students who have used dessert $caf{\acute{e}}$ mainly in college areas where dessert cafes are concentrated in Seoul. The survey was conducted on August 17, 2017 to 28 August. A total of 250 copies of the questionnaires were distributed and 208 copies of valid data were used for the analysis. The results of the analysis are as follows. First, emotional experience value and service experience value were found to affect customer loyalty, and cognitive experience value did not affect customer loyalty. Second, the economic and health seeking type showed a positive(+) moderating effect between emotional experience value and customer loyalty, and negative(-) moderating effect between cognitive experiential value and customer loyalty. Next, atmosphere seeking type showed a moderating effect between service experience value and customer loyalty, and the eating out seeking type showed a moderating effect between emotional experience value and customer loyalty. Finally, convenience seeking type showed positive(+) moderating effect between cognitive experiential value and customer loyalty, and negative(-) moderating effect between service experience value and customer loyalty. Based on the results of this study, the dessert cafe operator can grasp the experience value of college students in order to secure college students who are using dessert cafe as loyal customers. In particular, the relationship between experience value and customer loyalty, it is expected to provide useful data for constructing a specific positioning strategy according to each segment market.