Improving Customer Value Index and Consumption Forecasts using a Weighted RFM Model and Machine Learning Algorithms

Collecting and mining customer consumption data are crucial to assess customer value and predict customer consumption behaviors. This paper proposes a new procedure, based on an improved Random Forest Model by: adding a new indicator, joining the RFMS-based method to a K-means algorithm with the Entropy Weight Method applied in computing the customer value index, classifying customers to different categories, and then constructing a consumption forecasting model whose RMSE is the smallest in all kinds of data mining models. The results show that identifying customers by this improved RMF model and customer value index facilitates customer profiling, and forecasting customer consumption enables the development of more precise marketing strategies.

Improving Customer Value Index and Consumption Forecasts Using a Weighted RFM Model and Machine Learning Algorithms

Collecting and mining customer consumption data are crucial to assess customer value and predict customer consumption behaviors. This paper proposes a new procedure, based on an improved Random Forest Model by: adding a new indicator, joining the RFMS-based method to a K-means algorithm with the Entropy Weight Method applied in computing the customer value index, classifying customers to different categories, and then constructing a consumption forecasting model whose RMSE is the smallest in all kinds of data mining models. The results show that identifying customers by this improved RMF model and customer value index facilitates customer profiling, and forecasting customer consumption enables the development of more precise marketing strategies.

Research on the Relationship Between Service Guarantee Perception and Customer Value in the Chinese Context

As an excellent management tool, service guarantee can improve the competitive advantage of enterprises and allow consumers to obtain high-quality products and services. However, in the current Chinese context, this tool has not played its proper function. One important reason is the perception deviation of Chinese consumers. This research analyzes the main reasons for this deviation, puts forward related hypotheses and research models, and discusses the influence of disposition to trust of contract, perceived structural assurance (PSA), and subjective norm on service guarantee perception (SGP). Also, this study discusses SGP of customers through perceived risk and quality. Through the verification of 574 sample data, the main conclusions are as follows: (1) Disposition to trust of contract, subjective norms, and PSA significantly affect SGP positively; (2) SGP positively affects customer value (CUV); and (3) SGP s are obviously different between people of different ages, education levels, and income levels. Hopefully, these conclusions can have the following enlightenment to enterprises serving Chinese consumers: (1) in the designing stage of service guarantee, perception of customers of this guarantee should be a consideration; (2) CUV can be a proper direction if an enterprise wish to lead the guarantee perception of the customer; (3) Not all products need the same level of service guarantee; and (4)The proper service guarantee level depends on various statistical characteristics of target customers of the service.

Gamification in Marketing

Advances in digital marketing technologies and the experience and value they provide to consumers have become important factors in market success. Therefore, businesses are focusing much more on the use of innovative technologies such as gamification. Gamification is the use of game design elements and mechanisms in non-game environments to increase the motivation of users to guide their behavior. Gamification elements used in marketing activities have an impact on the attitudes and behaviors of consumers towards brands, products, and services by increasing experience and value for them. Accordingly, this chapter is aimed at evaluating the gamified marketing activities from the perspective of customer value. In this context, the concepts of customer value and gamification are examined, and gamification techniques used in marketing and their effects on consumer value are evaluated. Also, the case study of Starbucks' gamified mobile application is presented from the perspective of customer value.

Customer Value of Smart Grid Application

The authors investigate customer value of smart grid application in smart city from the perspective of main research paradigms of customer value. Data is based on questionnaire for customers (N=131), deep interviews among specialists (7=N), and two months of observation. The results show that the typical user of smart grid technology is a male aged between 30 and 69 who considers that using the application is interesting because of the perceived benefits. Developing strong customer relationship is formed through the provision of e-service quality that has a key role in maintaining customer trust, satisfaction, and loyalty. End-product and service process paradigms to measure customer value do not fully take the complex context of smart cities into consideration, and the ecosystem paradigm must be developed to analyze customer value in smart cities in interactive dynamic decentralized environment where cumulative big data is used to match the customer needs with new digital services.