Models of Customer Behavior: From Populations to Individuals

11 Pages Posted: 9 Oct 2008

See all articles by Tianyi Jiang

Tianyi Jiang

affiliation not provided to SSRN

Alexander Tuzhilin

New York University (NYU) - Leonard N. Stern School of Business; New York University (NYU) - Department of Information, Operations, and Management Sciences

Date Written: 2004

Abstract

There have been various claims made in the marketing community about the benefits of 1-to-1 marketing versus traditional customer segmentation approaches and how much they can improve understanding of customer behavior. However, few rigorous studies exist that systematically compare these approaches. In this paper, we conducted such a systematic study and compared the performance of aggregate, segmentation, and 1-to-1 marketing approaches across a broad range of experimental settings such as multiple segmentation levels, multiple real world marketing datasets, multiple dependent variables, different types of classifiers, different segmentation techniques, and different predictive measures. Our results show that, overall, 1-to-1 modeling significantly outperforms the aggregate approach among high-volume customers and is never worse than aggregate approach among low-volume customers in our experimental settings. Moreover, the best segmentation techniques tend to outperform 1-to-1 modeling among low-volume customers.

Suggested Citation

Jiang, Tianyi and Tuzhilin, Alexander, Models of Customer Behavior: From Populations to Individuals (2004). Information Systems Working Papers Series, Vol. , pp. -, 2004. Available at SSRN: https://ssrn.com/abstract=1281316

Tianyi Jiang (Contact Author)

affiliation not provided to SSRN

Alexander Tuzhilin

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

New York University (NYU) - Department of Information, Operations, and Management Sciences

44 West Fourth Street
New York, NY 10012
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
100
Abstract Views
606
rank
263,669
PlumX Metrics