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

42 Pages Posted: 10 Aug 2012 Last revised: 27 Apr 2017

Kinshuk Jerath

Columbia University - Columbia Business School

Anuj Kumar

University of Florida - Warrington College of Business

Serguei Netessine

INSEAD

Date Written: December 9, 2014

Abstract

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.

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

JEL Classification: C10, M10, M31

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). Manufacturing and Service Operations Management (2015). 17(3), 368-383. Available at SSRN: https://ssrn.com/abstract=2127131 or http://dx.doi.org/10.2139/ssrn.2127131

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 )

337 STZ WARRINGTON COLLEGE OF BUSINESS
GAINESVILLE, FL 32611-0001
United States
3522730587 (Phone)

Serguei Netessine

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France
+33 (0)1 60 72 92 25 (Phone)

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