A quantile regression approach to gaining insights for reacquition of defected customers

As customer loyalty keeps declining, the importance of customer relationship management is paramount especially for online-service marketers. Reacquisition of defected customers is better than acquiring new customers in terms of marketing efficiency as well as effectiveness. However, the issue of winning back defected customers has been largely neglected among scholars. In this paper, we present empirical analyses based on real transactional data from 4000 users of one of the most successful online games in Korea to investigate the relationship between demographic, RFM, behavioral, and social network variables and the users’ response to reacquisition campaigns. Since the dependent variable is skewed, a quantile regression method was utilized for model estimation. To figure out what kind of characteristics would influence the likelihood of “staying alive” after the campaigns, the results from Period 1(win-back) were compared against those from Period 2(retention). The findings shed many useful insights in targeting and designing win-back campaigns.