{"title":"Analyzing the Dynamics of Customer Behavior: A New Perspective on Personalized Marketing through Counterfactual Analysis","authors":"Mona Ebadi Jalal, Adel Elmaghraby","doi":"10.3390/jtaer19030081","DOIUrl":null,"url":null,"abstract":"The existing body of research on dynamic customer segmentation has primarily focused on segment-level customer purchasing behavior (CPB) analysis to tailor marketing strategies for distinct customer groups. However, these approaches often lack the granularity required for personalized marketing at the individual level. Moreover, the analysis of customer transitions between different groups has largely been overlooked. This study addresses these gaps by developing an efficient framework that enables businesses to forecast customer behavior, assess the impact of various strategies on each customer separately, and analyze customer transition between segments. This can facilitate providing personalized marketing strategies, fostering a gradual transition toward a desired customer status, and enhancing the overall marketing precision. In this study, we employ time series feature vectors encompassing recency, frequency, monetary value, and lifespan, applying the K-means algorithm with a range of distance metrics for customer segmentation along with classification algorithms to predict customer behavior. Leveraging counterfactual analysis, we establish a solution for analyzing customer transitions between groups and evaluating personalized marketing strategies. Our findings underscore the superior performance of the Euclidean distance metric, closely followed by the Manhattan distance, in distinguishing the patterns in time series customer behavior, with logistic regression excelling in predicting customer status. This study enables decision-makers to forecast the impact of diverse marketing strategies on customer behavior which facilitates customer retention and engagement through well-informed decisions.","PeriodicalId":46198,"journal":{"name":"Journal of Theoretical and Applied Electronic Commerce Research","volume":null,"pages":null},"PeriodicalIF":5.1000,"publicationDate":"2024-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Theoretical and Applied Electronic Commerce Research","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.3390/jtaer19030081","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 0
Abstract
The existing body of research on dynamic customer segmentation has primarily focused on segment-level customer purchasing behavior (CPB) analysis to tailor marketing strategies for distinct customer groups. However, these approaches often lack the granularity required for personalized marketing at the individual level. Moreover, the analysis of customer transitions between different groups has largely been overlooked. This study addresses these gaps by developing an efficient framework that enables businesses to forecast customer behavior, assess the impact of various strategies on each customer separately, and analyze customer transition between segments. This can facilitate providing personalized marketing strategies, fostering a gradual transition toward a desired customer status, and enhancing the overall marketing precision. In this study, we employ time series feature vectors encompassing recency, frequency, monetary value, and lifespan, applying the K-means algorithm with a range of distance metrics for customer segmentation along with classification algorithms to predict customer behavior. Leveraging counterfactual analysis, we establish a solution for analyzing customer transitions between groups and evaluating personalized marketing strategies. Our findings underscore the superior performance of the Euclidean distance metric, closely followed by the Manhattan distance, in distinguishing the patterns in time series customer behavior, with logistic regression excelling in predicting customer status. This study enables decision-makers to forecast the impact of diverse marketing strategies on customer behavior which facilitates customer retention and engagement through well-informed decisions.
期刊介绍:
The Journal of Theoretical and Applied Electronic Commerce Research (JTAER) has been created to allow researchers, academicians and other professionals an agile and flexible channel of communication in which to share and debate new ideas and emerging technologies concerned with this rapidly evolving field. Business practices, social, cultural and legal concerns, personal privacy and security, communications technologies, mobile connectivity are among the important elements of electronic commerce and are becoming ever more relevant in everyday life. JTAER will assist in extending and improving the use of electronic commerce for the benefit of our society.