Investigating the post-complaint period by means of survival analysis

Authors:
Bart Lariviere;Dirk Van den Poel
Affiliations:
Department of Marketing, Ghent University, Hoveniersberg 24, 9000 Ghent, Belgium;Department of Marketing, Ghent University, Hoveniersberg 24, 9000 Ghent, Belgium
Venue:
Expert Systems with Applications: An International Journal
Year:
2005

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Abstract

Firms increasingly view each contact with their customers as an opportunity that needs to be managed. The primary purpose of this article is to gain a better understanding of the customers' post-complaint period. Specific focus is placed on the impact of effective complaint handling on actual customer behavior throughout the time, whereas previous research has mainly focused on time-invariant or intentional measures. Survival analysis techniques are used to investigate the longitudinal behavior of complainants after their problem recovery. The proportionality assumption is tested for each explanatory variable under investigation. In addition, the impact for each variable is estimated by means of survival forests. Survival forests enable us to explore the evolution over time of the effects of the covariates under investigation. As such, the impact of each explanatory variable is allowed to change when the experiment evolves over time, in contrast to 'proportional' models that restrict these estimates to be stationary. Our research is performed in the context of a financial services provider and analyses the post-complaint periods of 2326 customers. Our findings indicate that (i) it is interesting to consider complainants since they represent a typical and rather active customer segment, (ii) furthermore, it is beneficiary to invest in complaint handling, since these investments are likely to influence customers' future behavior and (iii) survival forests are a helpful tool to investigate the impact of complaint handling on future customer behavior, since its components provide evidence of changing effects over time.