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1 – 10 of 51
Article
Publication date: 30 September 2014

Yi-Wen Liao, Yi-Shun Wang and Ching-Hsuan Yeh

The purpose of this paper is to understand what drives customers’ behavioral loyalty and explore the relationship between intentional and behavioral loyalty in the context of…

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Abstract

Purpose

The purpose of this paper is to understand what drives customers’ behavioral loyalty and explore the relationship between intentional and behavioral loyalty in the context of e-tailing.

Design/methodology/approach

Based on the theory of reasoned action and the recency-frequency-monetary value model, this study proposes a research model to explore the relationships among satisfaction, switching cost, intentional loyalty (i.e. word of mouth (WOM) and repurchase intention), and behavioral loyalty (i.e. purchase frequency and monetary value). Data collected from 266 respondents in the context of e-tailing are tested against the research model using a partial least squares (PLS) approach.

Findings

The results indicate that both satisfaction and switching cost are positively related to intentional loyalty (i.e. WOM and repurchase intention), and that the relationship of satisfaction with intentional loyalty outweighs that of switching cost. Additionally, while repurchase intention significantly associates with purchase frequency and monetary value, a relatively small portion of the variance in both purchase frequency and monetary value are explained. More importantly, WOM is unrelated to both purchase frequency and monetary value. The insignificance of WOM and the low predictability of repurchase intention indicate that the relationship between intentional and behavioral loyalty is weak in e-tailing context.

Originality/value

This study provided empirical evidence to support the weak relationship between intentional and behavioral customer loyalty in the context of e-tailing. The findings provide several important theoretical and practical implications for e-tailing customer relationship management.

Details

Internet Research, vol. 24 no. 5
Type: Research Article
ISSN: 1066-2243

Keywords

Article
Publication date: 31 May 2022

Jianfang Qi, Yue Li, Haibin Jin, Jianying Feng and Weisong Mu

The purpose of this study is to propose a new consumer value segmentation method for low-dimensional dense market datasets to quickly detect and cluster the most profitable…

Abstract

Purpose

The purpose of this study is to propose a new consumer value segmentation method for low-dimensional dense market datasets to quickly detect and cluster the most profitable customers for the enterprises.

Design/methodology/approach

In this study, the comprehensive segmentation bases (CSB) with richer meanings were obtained by introducing the weighted recency-frequency-monetary (RFM) model into the common segmentation bases (SB). Further, a new market segmentation method, the CSB-MBK algorithm was proposed by integrating the CSB model and the mini-batch k-means (MBK) clustering algorithm.

Findings

The results show that our proposed CSB model can reflect consumers' contributions to a market, as well as improve the clustering performance. Moreover, the proposed CSB-MBK algorithm is demonstrably superior to the SB-MBK, CSB-KMA and CSB-Chameleon algorithms with respect to the Silhouette Coefficient (SC), the Calinski-Harabasz (CH) Index , the average running time and superior to the SB-MBK, RFM-MBK and WRFM-MBK algorithms in terms of the inter-market value and characteristic differentiation.

Practical implications

This paper provides a tool for decision-makers and marketers to segment a market quickly, which can help them grasp consumers' activity, loyalty, purchasing power and other characteristics in a target market timely and achieve the precision marketing.

Originality/value

This study is the first to introduce the CSB-MBK algorithm for identifying valuable customers through the comprehensive consideration of the clustering quality, consumer value and segmentation speed. Moreover, the CSB-MBK algorithm can be considered for applications in other markets.

Details

Kybernetes, vol. 52 no. 10
Type: Research Article
ISSN: 0368-492X

Keywords

Book part
Publication date: 4 December 2020

Irem Ucal Sari, Duygu Sergi and Burcu Ozkan

Customer segmentation is an important research area that helps organizations to improve their services according to customer needs. With the increased information that shows…

Abstract

Customer segmentation is an important research area that helps organizations to improve their services according to customer needs. With the increased information that shows customer attitudes, it is much easier and also more necessary than before to analyze customer responses on different campaigns. Recency, frequency, and monetary (RFM) analysis allows us to segment customers according to their common features. In this chapter, customer segmentation and RFM analysis are explained first, then a real case application of RFM analysis on customer segmentation for a Fuel company is presented. At the end of the application part, possible strategies for the company are generated.

Details

Application of Big Data and Business Analytics
Type: Book
ISBN: 978-1-80043-884-2

Keywords

Article
Publication date: 10 May 2018

Gianfranco Walsh, Mario Schaarschmidt and Stefan Ivens

Service providers leverage their corporate reputation management efforts to increase revenues by shaping customer attitudes and behaviours, yet the effects on customer innovation…

1128

Abstract

Purpose

Service providers leverage their corporate reputation management efforts to increase revenues by shaping customer attitudes and behaviours, yet the effects on customer innovation adoption and customer value remain unclear. In an extended conceptualisation of customer-based corporate reputation (CBR), the purpose of this paper is to propose that customer perceived risk, perceived value, and service separation are contingencies of the relationship between CBR and two key customer outcomes: customer new product adoption proneness (CPA) and recency-frequency-monetary (RFM) value.

Design/methodology/approach

Using a predictive survey approach, 1,001 service customers assess the online or offline operations of six multichannel retailers. The hypothesised model is tested using structural equation modelling and multigroup analysis.

Findings

The analysis reveals significant linkages of CBR with perceived risk and perceived value, as well as between perceived risk and perceived value and from perceived value to CPA and RFM value. These linkages vary in strength across unseparated (offline) and separated (online) services.

Research limitations/implications

This study uses cross-sectional data to contribute to literature that relates CBR to relevant customer outcomes by considering CPA and RFM value and investigating contingent factors. It provides conceptual and empirical evidence that price appropriateness represents a new CBR dimension.

Practical implications

The results reveal that CBR reduces customers’ perceived risk and positively affects their perceived value, which drives CPA and RFM value. Multichannel retailers can create rewarding customer relationships by building and nurturing good reputations.

Originality/value

This study is the first to link CBR with customer product adoption proneness and value, two important customer measures. It proposes and tests an extended conceptualisation of CBR.

Article
Publication date: 12 October 2012

Wen‐Yu Chiang

The purpose of this paper is to establish customers’ markets and rules of dynamic customer relationship management (CRM) systems for online retailers.

1824

Abstract

Purpose

The purpose of this paper is to establish customers’ markets and rules of dynamic customer relationship management (CRM) systems for online retailers.

Design/methodology/approach

This research proposes a procedure to discover customers’ markets and rules, which adopts the recency, frequency, monetary value (RFM) variables, transaction records, and socioeconomic data of the online shoppers to be the research variables. The research methods aim at the supervised apriori algorithm, C5.0 decision tree algorithm, and RFM model.

Findings

This research discovered eight RFM markets and six rules of online retailers.

Practical implications

The proposed framework and research results can help retailer managers to retain and expand high value markets via their dynamic CRM and POS systems.

Originality/value

This research uses data mining technologies to extract high value markets and rules for marketing plans. The research variables are easy to obtain via retailers’ systems. The found customer values, RFM markets, shopping association rules, and marketing decision rules can be discovered via the framework of this research.

Article
Publication date: 6 May 2017

Serhat Peker, Altan Kocyigit and P. Erhan Eren

The purpose of this paper is to propose a new RFM model called length, recency, frequency, monetary and periodicity (LRFMP) for classifying customers in the grocery retail…

4043

Abstract

Purpose

The purpose of this paper is to propose a new RFM model called length, recency, frequency, monetary and periodicity (LRFMP) for classifying customers in the grocery retail industry; and to identify different customer segments in this industry based on the proposed model.

Design/methodology/approach

This study combines the LRFMP model and clustering for customer segmentation. Real-life data from a grocery chain operating in Turkey is used. Three cluster validation indices are used for optimizing the number of groups of customers and K-means algorithm is employed to cluster customers. First, attributes of the LRFMP model are extracted for each customer, and then based on LRFMP model features, customers are segmented into different customer groups. Finally, identified customer segments are profiled based on LRFMP characteristics and for each customer profile, unique CRM and marketing strategies are recommended.

Findings

The results show that there are five different customer groups and based on LRFMP characteristics, they are profiled as: “high-contribution loyal customers,” “low-contribution loyal customers,” “uncertain customers,” “high-spending lost customers” and “low-spending lost customers.”

Practical implications

This research may provide researchers and practitioners with a systematic guideline for effectively identifying different customer profiles based on the LRFMP model, give grocery companies useful insights about different customer profiles, and assist decision makers in developing effective customer relationships and unique marketing strategies, and further allocating resources efficiently.

Originality/value

This study contributes to prior literature by proposing a new RFM model, called LRFMP for the customer segmentation and providing useful insights about behaviors of different customer types in the Turkish grocery industry. It is also precious from the point of view that it is one of the first attempts in the literature which investigates the customer segmentation in the grocery retail industry.

Details

Marketing Intelligence & Planning, vol. 35 no. 4
Type: Research Article
ISSN: 0263-4503

Keywords

Article
Publication date: 1 January 2016

Cheng-Hsiung Weng

The paper aims to understand the book subscription characteristics of the students at each college and help the library administrators to conduct efficient library management…

Abstract

Purpose

The paper aims to understand the book subscription characteristics of the students at each college and help the library administrators to conduct efficient library management plans for books in the library. Unlike the traditional association rule mining (ARM) techniques which mine patterns from a single data set, this paper proposes a model, recency-frequency-college (RFC) model, to analyse book subscription characteristics of library users and then discovers interesting association rules from equivalence-class RFC segments.

Design/methodology/approach

A framework which integrates the RFC model and ARM technique is proposed to analyse book subscription characteristics of library users. First, the author applies the RFC model to determine library users’ RFC values. After that, the author clusters library users’ transactions into several RFC segments by their RFC values. Finally, the author discovers RFC association rules and analyses book subscription characteristics of RFC segments (library users).

Findings

The paper provides experimental results from the survey data. It shows that the precision of the frequent itemsets discovered by the proposed RFC model outperforms the traditional approach in predicting library user subscription itemsets in the following time periods. Besides, the proposed approach can discover interesting and valuable patterns from library book circulation transactions.

Research limitations/implications

Because RFC thresholds were assigned based on expert opinion in this paper, it is an acquisition bottleneck. Therefore, researchers are encouraged to automatically infer the RFC thresholds from the library book circulation transactions.

Practical implications

The paper includes implications for the library administrators in conducting library book management plans for different library users.

Originality/value

This paper proposes a model, the RFC model, to analyse book subscription characteristics of library users.

Details

The Electronic Library, vol. 34 no. 5
Type: Research Article
ISSN: 0264-0473

Keywords

Article
Publication date: 13 July 2015

Hülya Güçdemir and Hasan Selim

– The purpose of this paper is to develop a systematic approach for business customer segmentation.

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Abstract

Purpose

The purpose of this paper is to develop a systematic approach for business customer segmentation.

Design/methodology/approach

This study proposes an approach for business customer segmentation that integrates clustering and multi-criteria decision making (MCDM). First, proper segmentation variables are identified and then customers are grouped by using hierarchical and partitional clustering algorithms. The approach extended the recency-frequency-monetary (RFM) model by proposing five novel segmentation variables for business markets. To confirm the viability of the proposed approach, a real-world application is presented. Three agglomerative hierarchical clustering algorithms namely “Ward’s method,” “single linkage” and “complete linkage,” and a partitional clustering algorithm, “k-means,” are used in segmentation. In the implementation, fuzzy analytic hierarchy process is employed to determine the importance of the segments.

Findings

Business customers of an international original equipment manufacturer (OEM) are segmented in the application. In this regard, 317 business customers of the OEM are segmented as “best,” “valuable,” “average,” “potential valuable” and “potential invaluable” according to the cluster ranks obtained in this study. The results of the application reveal that the proposed approach can effectively be used in practice for business customer segmentation.

Research limitations/implications

The success of the proposed approach relies on the availability and quality of customers’ data. Therefore, design of an extensive customer database management system is the foundation for any successful customer relationship management (CRM) solution offered by the proposed approach. Such a database management system may entail a noteworthy level of investment.

Practical implications

The results of the application reveal that the proposed approach can effectively be used in practice for business customer segmentation. By making customer segmentation decisions, the proposed approach can provides firms a basis for the development of effective loyalty programs and design of customized strategies for their customers.

Social implications

The proposed segmentation approach may contribute firms to gaining sustainable competitive advantage in the market by increasing the effectiveness of CRM strategies.

Originality/value

This study proposes an integrated approach for business customer segmentation. The proposed approach differentiates itself from its counterparts by combining MCDM and clustering in business customer segmentation. In addition, it extends the traditional RFM model by including five novel segmentation variables for business markets.

Details

Industrial Management & Data Systems, vol. 115 no. 6
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 10 April 2024

Aslıhan Dursun-Cengizci and Meltem Caber

This study aims to predict customer churn in resort hotels by calculating the churn probability of repeat customers for future stays in the same hotel brand.

49

Abstract

Purpose

This study aims to predict customer churn in resort hotels by calculating the churn probability of repeat customers for future stays in the same hotel brand.

Design/methodology/approach

Based on the recency, frequency, monetary (RFM) paradigm, random forest and logistic regression supervised machine learning algorithms were used to predict churn behavior. The model with superior performance was used to detect potential churners and generate a priority matrix.

Findings

The random forest algorithm showed a higher prediction performance with an 80% accuracy rate. The most important variables were RFM-based, followed by hotel sector-specific variables such as market, season, accompaniers and booker. Some managerial strategies were proposed to retain future churners, clustered as “hesitant,” “economy,” “alternative seeker,” and “opportunity chaser” customer groups.

Research limitations/implications

This study contributes to the theoretical understanding of customer behavior in the hospitality industry and provides valuable insight for hotel practitioners by demonstrating the methods that facilitate the identification of potential churners and their characteristics.

Originality/value

Most customer retention studies in hospitality either concentrate on the antecedents of retention or customers’ revisit intentions using traditional methods. Taking a unique place within the literature, this study conducts churn prediction analysis for repeat hotel customers by opening a new area for inquiry in hospitality studies.

Details

International Journal of Contemporary Hospitality Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 13 December 2017

Wen-Yu Chiang

The purpose of this study is to discover valuable customers for enterprises. The international market of Taiwan airlines can be enhanced; thus, this study aims at Taiwan’s airline…

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Abstract

Purpose

The purpose of this study is to discover valuable customers for enterprises. The international market of Taiwan airlines can be enhanced; thus, this study aims at Taiwan’s airline market as a research area.

Design/methodology/approach

This research uses data mining technologies with a proposed model to analyse airline customer values for big data online marketing systems, such as customer relationship management (CRM) system. The research applied supervised apriori algorithm, socio-economic variables and a proposed model to discover the rules/markets.

Findings

The results show that eight markets were discovered and three association rules were established for business systems of airlines.

Originality/value

The valuable travellers/markets can be discovered by this research. By collecting shoppers’ transactional data, global online CRM and point of sales (POS) systems can be big data marketing systems. The research framework can be easily applied in online CRM/POS or big data marketing systems for international airlines; however, it is for other global businesses as well.

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