Durable product review mining for customer segmentation

Abstract

Purpose

More and more e-commerce web sites are using online customer reviews (OCRs) for customer segmentation. However, for durable products, customer purchases, and reviews only once for a long time, as while the product review score may highly affected by service factors or be “gently” evaluated. Existing regression or machine learning-based methods suffer from low accuracy when applied to the OCRs of durable products on e-commerce web sites. The purpose of this paper is to propose a new approach for customer segment analysis base on OCRs of durable products.

Design/methodology/approach

The research proposes a two-stage approach that employs latent class analysis (LCA): the feature-mention matrix construction stage and the LCA-based customer segmentation stage. The approach considers reviewers’ mention on product features, and the probability-based LCA method is adopted upon the characteristics of online reviews, to effectively cluster reviewers into specified segmentations.

Findings

The research finding is that, using feature-mention instead of feature-opinion records makes segment analysis more effective. The research also finds that, LCA method can better explain the characteristics of the OCR data of durable products for customer segmentation.

Practical implications

The research proposes a new approach to durable product review mining for customer segmentation analysis. The segment analysis result can provide supports for new product design and development, repositioning of existing products, marketing strategy development and product differentiation.

Originality/value

A new approach for customer segmentation analysis base on OCRs of durable products is proposed.

Citation

Jiang, S., Cai, S., Olle Olle, G. and Qin, Z. (2015), "Durable product review mining for customer segmentation", Kybernetes, Vol. 44 No. 1, pp. 124-138. https://doi.org/10.1108/K-06-2014-0117