Customer Intimacy Analytics Leveraging Operational Data to Assess Customer Knowledge and Relationships and to Measure their Business Impact by Francois Habryn Scientific Publishing
CUSTOMER INTIMACY ANALYTICS LEVERAGING OPERATIONAL DATA TO ASSESS CUSTOMER KNOWLEDGE AND RELATIONSHIPS AND TO MEASURE THEIR BUSINESS IMPACT Zur Erlangung des akademischen Grades eines Doktors der Wirtschaftswissenschaften (Dr. rer. pol.) von der Fakultat fur Wirtschaftswissenschaften des Karlsruher Institut fiir Technologie (KIT) genehmigte Dissertation von Francois Habryn Tag der mundlichen Prufung: 16. Februar 2012 Referent: Prof. Dr. Gerhard Satzger Korreferent: Prof. Dr. Rudi Studer Karlsruhe
Preface Acknowledgements Abstract i iii v I. Foundations and Preliminaries 1 1. Introduction 3 1.1. Research Problem 6 1.2. Research Objective 8 1.3. Research Approach 11 1.4. Research Questions 14 1.5. Structure of the Thesis 16 2. Towards Customer Intimacy, 19 2.1. Three Value Disciplines to Achieve Market Leadership 20 2.1.1. Operational Excellence and Product Leadership as Alternatives to Customer Intimacy 23 2.1.2. The Value Discipline Customer Intimacy... 26 2.2. Customer Intimacy: Grounded in Relationships and Services 31 2.2.1. Two Divergent Perspectives on Marketing... 32 2.2.2. The Service Dimension of Relationship Marketing 35
viii Contents 2.2.3. The Service-Dominant Logic as an Evolution of Relationship Marketing 38 2.2.4. Customer Intimacy: A Relationship and Service Based Value Discipline 42 2.3. Three Approaches Related to Customer Intimacy... 45 2.3.1. Key Account Management 45 2.3.2. Market Orientation 48 2.3.3. Customer Relationship Management 51 2.3.4. Customer Intimacy: A Specific Adoption of the Marketing Concept 55 3. Methods and Techniques to Assess Customer Intimacy 59 3.1. Network Analysis 60 3.1.1. Graph Theory for the Representation of Social Networks 61 3.1.2. Centrality Metrics for the Analysis of Social Networks 64 3.1.3. Using Social Network Analysis for Assessing Customer Intimacy 67 3.2. Data Mining 69 3.2.1. The Process of Knowledge Discovery in Databases 70 3.2.2. Selection of the Machine Learning Algorithms. 73 3.2.3. Evaluation of the Machine Learning Models.. 82 II. Conceptual Model 89 4. Customer Intimacy Breakdown Analysis 91 4.1. Existing Approaches for Assessing Customer Intimacy 92 4.2. Overview of the Customer Intimacy Breakdown Analysis 96 4.3. Acquired Customer Intimacy Components 100 4.3.1. Acquired Customer Knowledge 101 4.3.2. Established Customer Relationships 103 4.4. Leveraged Customer Intimacy Components 106 4.4.1. Customization 107 J
ix 4.4.2. Loyalty 109 4.4.3. Proactiveness Ill 4.4.4. Cross-selling 112 4.4.5. Customer Participation 114 4.4.6. Transaction Costs Reduction 116 5. Cl Analytics Model and Methodology 119 5.1. CI Analytics Overview 120 5.1.1. CI Analytics Methodology '. 120 5.1.2. CI Analytics Model 126 5.2. Assessment of the Acquired Customer Intimacy... 129 5.2.1. Using Interactions and Networks to Assess Acquired Customer Intimacy 130 5.2.2. Customer Intimacy Metrics at the Individual Level 133 5.2.3. Customer Intimacy Metrics at the Organizational Level 147 5.2.4. Empirical Assessment of the Acquired Customer Intimacy 153 5.3. Assessment of the Leveraged Customer Intimacy... 156 5.3.1. Customization 157 5.3.2. Customer Loyalty 158 5.3.3. Proactiveness 159 5.3.4. Cross-selling 160 5.3.5. Customer Participation 162 5.3.6. Transaction Costs Reduction 163 III. Evaluation 165 6. CI Analytics Software 167 6.1. CI Analytics Business Analysis 168 6.1.1. Requirements Analysis 168 6.1.2. Business Objects Analysis 176 6.2. CI Analytics Architecture 179 6.2.1. Architecture Overview 179
6.2.2. CI Data Warehouse ) 181 6.2.3. CIETL 185 6.2.4. CI Services 187 6.2.5. CI Dashboard 191 6.3. CI Analytics Evaluation 196 6.3.1. Requirements Assessment 197 6.3.2. Business Benefits Evaluation 202 7. CI Analytics Validation 211 7.1. Acquired Customer Intimacy at the Individual Level. 213 7.1.1. Data Collection 213 7.1.2. Calibration: Acquired Knowledge 221 7.1.3. Calibration: Established Relationships 234 7.2. Acquired Customer Intimacy at the Organizational Level242 7.2.1. Data Collection 243 7.2.2. Calibration: Acquired Knowledge 247 7.2.3. Calibration: Established Relationships 255 7.3. Summary and Interpretation of the Calibration Results 262 7.3.1. Results Summary 262 7.3.2. Results Interpretation 266 8. Conclusion 269 8.1. Contribution 270 8.2. Managerial Implications 275 8.3. Outlook on Future Research 278 Bibliography 285 Appendix 307 A. Questionnaire Customer Intimacy 307 A.I. English Version 307 A.2. German Version 312 B. Machine Learning Algorithms Settings 317 C. Acquired Customer Intimacy at the Individual Level. 322 D. Acquired Customer Intimacy at the Organizational Level333
xi E. CI Analytics Implementation 342 E.I. CI Services for Calculating the Acquired Customer Intimacy Metrics 342 E.2. CI Services for Calculating the Leveraged Customer Intimacy Metrics 345 E.3. C/ Graph: A First Prototype of CI Analytics... 348 E.4. Business Benefits Analysis 353