Journal article
The impact of personalised incentives on the profitability of customer retention campaigns
Journal of marketing management, Vol.33(5-6), pp.327-347
2017
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Abstract
Traditional approaches to managing customer churn have typically concentrated on those customers most likely to defect. While accurately predicting customer churn probability is important, this metric alone does not sufficiently empower managers to make optimal decisions. Hence, the current study focuses on the relationship between retention incentives and profit maximisation. Specifically, we improve existing churn management practices by: (1) allowing for customer heterogeneity in incentive redemption behaviour, (2) introducing the dependence of the probability of accepting an incentive on its monetary value, and (3) offering an improved model for developing retention campaigns. We support our conclusions with empirical data and simulations and make tangible managerial recommendations.
Details
- Title
- The impact of personalised incentives on the profitability of customer retention campaigns
- Creators
- Ali Tamaddoni - Deakin UniversityStanislav Stakhovych - Monash UniversityMichael Ewing - Deakin University
- Publication Details
- Journal of marketing management, Vol.33(5-6), pp.327-347
- Publisher
- Taylor & Francis
- Number of pages
- 21
- Identifiers
- 991013124212202368
- Copyright
- © 2017 Westburn Publishers Ltd.
- Academic Unit
- Faculty of Business, Law and Arts
- Language
- English
- Resource Type
- Journal article