Customer Acquisition Strategies Research Articles

Customer Acquisition via Explainable Deep Reinforcement Learning

Effective customer acquisition is crucial for digital platforms, with sequential targeting ensuring that marketing messages are both timely and relevant. The proposed deep recurrent Q-network with attention (DRQN-attention) model enhances this process by optimizing long-term rewards and increasing decision-making transparency. Tested with a data set from a digital bank, the DRQN-attention model has proven to enhance clarity in decision making and outperform traditional methods in boosting long-term rewards. Its attention mechanism acts as a strategic tool for forward planning, pinpointing crucial ad marketing channels that are likely to engage and convert prospects. This capability enables marketers to understand the dynamic targeting strategies of the proposed model that align with customer profiles, dynamic behaviors, and the seasonality of the markets, thereby boosting confidence and effectiveness in their customer acquisition strategies.

Pay more attention to consumers: exploring customer acquisition strategies of large third-party sellers on e-B2C market

PurposeThis study develops an empirical framework to address how large third-party sellers (TPSs) can apply customer acquisition strategies to improve their performance in consumers’ person-goods matching process and how the platform firm’s similar strategies moderate the effects of TPSs’ strategies.Design/methodology/approachUsing data collected from the top ten TPSs from a Chinese e-commerce platform, the fixed effect model is used to validate the conceptual model and hypotheses.FindingsThe study results show that both market detection strategy and matching optimization strategy can help large TPSs improve their sales performance. Moreover, the similar market detection strategy applied by the platform firm weakens the effect of large TPSs’ customer acquisition strategies, while the similar matching optimization strategy applied by the platform firm strengthens the effect of large TPSs’ customer acquisition strategies.Originality/valueThis study provides firsthand evidence on the performance of large TPSs’ and the platform firm’s strategies. It demonstrates the effectiveness of large TPSs’ market detection strategy and matching optimization strategy, which can be adopted to meet consumers’ search and evaluation motivations in their person-goods matching process respectively. Moreover, it identifies the role of platform firms by showing the moderating effect of similar strategies adopted by the platform firm on the effect of large TPSs’ customer acquisition strategies.

Cultural distance and customer orientation strategy of Chinese service MNEs under the belt and road initiative

PurposeThe purpose of this paper is to explore mechanisms of cultural distance in the base of Chinese Service Multi-National Enterprise (MNE) settings. When attempting to enter overseas markets, many service MNEs face challenges caused by the cultural distance between the home and host countries. Culture distance attracts much attention in academia and industry. However, there are few empirical works to examine how cultural distance affects customer orientation strategies in a global supply chain. This paper aims to answer the following research question: How is the effect of cultural distance on customer acquisition and customer retention strategies, and the effect of customer orientation strategies on the performance of service-oriented MNEs controlled by Chinese capital along the Belt and Road Initiative?Design/methodology/approachThis paper examines the effect of cultural distance on the customer acquisition strategy and customer retention strategy, and the effect of customer orientation strategies on the performance of Chinese Service MNEs. A large-scale empirical study of Chinese Service MNEs operating in overseas markets is performed and questionnaires were distributed and collected. This paper uses Hofstede's method (Hofstede, 2010), Schwartz's method (Schwartz, 2003) and House et al.'s method (House et al., 2004) to calculate cultural distance. By using each kind of method, this study calculates the absolute culture distance and relative culture distance respectively.FindingsThe results suggest that cultural distance negatively affects customer orientation strategy, customer acquisition strategy positively affects performance and the interaction of customer acquisition and customer retention positively affects performance.Research limitations/implicationsThis study aims to contribute to the existing literature with a more fine-grained understanding of the inclusion of customer orientation strategy of Chinese Service MNEs in global supply chains.Practical implicationsThe findings outline several important implications that Chinese Service MNEs seeking to expand to overseas markets.Originality/valueThis paper contributes a novel, combined perspective of culture distance and customer orientation strategy.

INNOVATIVE APPROACHES TO THE DEVELOPMENT OF HOTEL INDUSTRY ENTERPRISES: FOREIGN EXPERIENCE

Purpose. The aim of the article is generalization of the provisions of innovative approaches to the development of hospitality enterprises implemented in foreign practice. Methodology of research. The following were used in the course of the study: the method of systematization, which made it possible to classify modern innovative approaches in this area; a statistical method necessary to establish the effectiveness of the implementation of these approaches in foreign practice; a comparison method that is used to assess the possibility of implementing foreign practices in Ukrainian conditions. Findings. Generalizations of the provisions of innovative approaches to the development of hospitality enterprises, which are implemented in foreign practice, are presented. The following innovative approaches are highlighted in these areas, including: an innovative approach to optimizing contacts between staff and clients of hotel enterprises (using monitoring contact models); an innovative approach associated with the creation of new customer acquisition strategies that combine information technology capabilities and full compliance with supply and demand in the hotel services market; an innovative approach based on increasing the number of customers due to increased loyalty of hotel service; an innovative approach based on the use of a development strategy benchmark for the introduction of greening of accommodation premises, their operation, customer service, the use of energy-saving technologies in the field of heating, energy supplies and other, ecological use of waste products. The effectiveness of the implementation of these innovative approaches is determined on the basis of the materials of the considered empirical studies, the probability of their application in the conditions of the functioning of the Ukrainian hospitality enterprises is proved. Originality lies in the fact that the study further developed the issue of systematizing innovative approaches to the development of hospitality enterprises, which are implemented in foreign practice. Practical value. The determined results of the study are based on the fact that certain innovative approaches to development can be implemented in the development of hospitality enterprises in Ukraine. Key words: innovative approaches, development, hospitality enterprises, hotel service loyalty, energy-saving technologies, greening of premises, monitoring contact models, customer involvement.

Timely After-Sales Service and Technology Adoption: Evidence from the Off-Grid Solar Market in Uganda

Adoption and continued use of novel technologies has the potential to significantly accelerate social and economic development in emerging markets. In this paper, we examine to what extent timely after-sales service — i.e., fast resolution of repair tasks — impacts technology adoption in emerging markets. We address this question using detailed customer-level sales and service data from a leading solar distribution company operating in Uganda. We develop a fixed effects base specification and two instrumental variables specifications that leverage different sources of geo-spatial variation — in service task locations, weather and road quality. We find that timely after-sales service experienced by existing customers is a strong driver of adoption by first-time users. A one week increase in average wait time for service decreases adoption by 5.3% to 32.2%. The relationship between wait times and adoptions is highly non-linear. The longer customers have been waiting, the greater the negative consequences of an incremental increase in wait time. We also find that the number of customers acquired through referrals from an existing customer depends on the referring customer's service wait time. This provides evidence of a strong word-of-mouth channel of information sharing. Our findings have direct implications for the customer acquisition strategies of technology firms and for technology investors in emerging markets. Our results are also relevant for policy makers who aim to harness technology to improve the socio-economic lives of people living in these regions.

Customer segmentation in e-commerce: Applications to the cashback business model

This paper presents a segmentation of cashback website customers. The segmentation is based on customers' commercial activity and role within the site's social network. In this social network, customers profit from the transactions they make on affiliate websites. Mixing traditional marketing strategies with word-of-mouth recommendations is crucial for the success of this business model because these recommendations boost new customer acquisitions and strengthen the loyalty of existing customers. This study shows how the customer's role within the cashback website's social network determines the customer's behavior and commercial activity on the website. The segmentation presented describes the customer journey in terms of customer profitability and seniority. The findings explain customer behavior in e-commerce and the value of applying personalized retention strategies to each cluster rather than generic strategies or customer acquisition strategies. This paper describes how customers move between clusters, enabling practitioners to increase customer loyalty and long-term profitability.

Satellite Radio: An Industry Case Study

Radio broadcasting is characterized by diffused taste for programming and highly fragmented supply of content. Satellite radio is a major technological breakthrough that promises to reshape this industry by, among other things, satisfying a greater diversity in tastes and promoting greater variety in content provision. A major issue is that the economies of scale are such that it is unlikely more than a few (currently, just two) providers can operate in this market due to the considerable infrastructure and content costs.To study the industry structure (demand and cost analysis), analyze customer acquisition strategies and the resulting lock-in of customers, and the aggressive bidding for content that takes place in this industry.

Regaining drifting mobile communication customers: Predicting the odds of success of winback efforts with competing risks regression

Mobile network operators (MNOs) make considerable efforts to reduce customer defection (= churn) by trying to motivate customers who announced to cancel their contract at the next legally possible date to withdraw their notification and to sign another postpaid contract or at least to accept a prepaid offer in case that they are unwilling to completely revoke their cancellation. Nevertheless, empirical evidence on factors significantly associated with the odds of success of an MNO’s reactive winback attempt is scarce. As a consequence, this study explores the capability of socio-demographic, contract and service usage characteristics of MNO subscribers as well as their stated primary reason for contract termination to predict the likelihood of a fully successful winback at the individual customer level. In a sample of 305,466 postpaid residential customers of the German subsidiary of a multinational MNO, competing risks regression analysis suggests that younger customers with above average service usage levels who were already in a tariff plan bundling mobile voice and Internet access services, yet had received a subsidized device from their current provider in the past, had not originally signed their contract in the firm’s own outlets and stated they cancelled their contract as a precautionary move or due to tariff level/structure reasons exhibit the highest prospects of full restoration. Moreover, the analysis reveals that the covariates studied and the competing risks regression technique achieve a satisfactory performance in predicting the outcome of the MNO’s customer winback efforts. Results are discussed in terms of basic entry points of MNOs for improving both their reactive winback as well as their new customer acquisition strategies.

Competitive Density and the Customer Acquisition–Retention Trade-Off

Abstract The authors build on conceptual and analytic evidence to argue that firms can increase performance by shifting emphasis away from customer retention strategies toward customer acquisition strategies as competitive density (i.e., the number of competitors) increases and the marketplace becomes more dynamic. Empirical research using four data sources for a single artistic industry produces strong support for the moderation hypotheses. When competitive density is low, a customer retention strategy emphasizing close relationships with customers and adaptive learning enhances performance. When competitive density is high, a customer acquisition strategy emphasizing innovation and competitor learning enhances performance. Four key takeaways emerge. As competitive density increases, (1) the financial impact of choosing the right mix of resources and capabilities increases; (2) close customer relationships become liabilities, providing no revenue benefits and exerting a negative effect on net income; (3)...

Competitive Density and the Customer Acquisition–Retention Trade-Off

The authors build on conceptual and analytic evidence to argue that firms can increase performance by shifting emphasis away from customer retention strategies toward customer acquisition strategies as competitive density (i.e., the number of competitors) increases and the marketplace becomes more dynamic. Empirical research using four data sources for a single artistic industry produces strong support for the moderation hypotheses. When competitive density is low, a customer retention strategy emphasizing close relationships with customers and adaptive learning enhances performance. When competitive density is high, a customer acquisition strategy emphasizing innovation and competitor learning enhances performance. Four key takeaways emerge. As competitive density increases, (1) the financial impact of choosing the right mix of resources and capabilities increases; (2) close customer relationships become liabilities, providing no revenue benefits and exerting a negative effect on net income; (3) close relationships with suppliers increase revenues but also expenses, so that net income decreases; and (4) adaptive learning lowers revenue and, even more so, expenses, so that net income increases. The authors discuss the implications of these findings and identify combinations of resources and capabilities that achieve different performance objectives.

Switching banks: Old bank gone but not forgotten

Losing customers to another bank tends to worry bank executives. Understanding the reasons why customers switch banks helps these executives plan their customer retention (including customer recovery) and customer acquisition strategies. This paper improves our understanding of switching by applying a categorisation of switching behaviour observed in repertoire markets to subscription markets. This allows us to make predictions about the content of customers' post-switch brand repertoires, or consideration sets. We test our predictions with a large commercial data set and find that switching antecedents pertaining to utility maximisation (‘moving for a better offer’) and expectation disconfirmation (usually service failures) confirm previous research findings. We, however, make the new discovery that stochastic reasons (those beyond the bank's control) account for a considerable amount of switching and lead to greater post-switch consideration. Our study shows that construction of customers' post-switch consideration sets is therefore antecedent specific, and concludes that while the previous main bank brand may have been forsaken, it is certainly not forgotten. Enough goodwill for the previous main bank brand resides in these results to warrant bank executives reconsidering their customer-recapture strategies.