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An Information Stock Model of Customer Behavior in Multichannel Customer Support Services

Kinshuk Jerath

Columbia University - Columbia Business School

Anuj Kumar

University of Florida - Warrington College of Business

Serguei Netessine


December 9, 2014

INSEAD Working Paper No. 2014/64/TOM

We develop a model to understand and predict customers’ observed multichannel behavior in a customer support setting. Using individual-level data from a US-based health insurance firm, we model a customer's query frequency and choice of using the telephone or web channel for resolving queries as a stochastic function of her latent “information stock.” The information stock is a function of the customer’s “information needs” (which arise when customers file health insurance claims) and “information gains” (which customers obtain when they resolve their queries through the telephone and web support channels), and other factors such as seasonal effects (for instance, queries that arise at the time of annual contract renewal). We find that: average information gain from a telephone call is twice as much as that from visiting the web portal; customers prefer the telephone channel for health event-related information but prefer the web portal for structured seasonal information; and customers are polarized in their propensities of using the web channel and can be broadly classified into “web avoiders” and “web seekers.” Our model provides superior in-sample and out-of-sample fit than multiple benchmark models for aggregate and individual-level customer activity, and has several managerial uses, such as capacity planning.

Number of Pages in PDF File: 42

Keywords: Multichannel Customer Behavior, Customer Service, Call Center, Empirical OM, Probability Modeling

JEL Classification: C10, M10, M31

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Date posted: August 10, 2012 ; Last revised: December 10, 2014

Suggested Citation

Jerath, Kinshuk and Kumar, Anuj and Netessine, Serguei, An Information Stock Model of Customer Behavior in Multichannel Customer Support Services (December 9, 2014). INSEAD Working Paper No. 2014/64/TOM. Available at SSRN: http://ssrn.com/abstract=2127131 or http://dx.doi.org/10.2139/ssrn.2127131

Contact Information

Kinshuk Jerath (Contact Author)
Columbia University - Columbia Business School ( email )
3022 Broadway
New York, NY 10027
United States

Anuj Kumar
University of Florida - Warrington College of Business ( email )
GAINESVILLE, FL 32611-0001
United States
3522730587 (Phone)
Serguei Netessine
INSEAD ( email )
Boulevard de Constance
77305 Fontainebleau Cedex
+33 (0)1 60 72 92 25 (Phone)

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References:  26
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