Modeling Customer Opt-In and Opt-Out in a Permission-Based Marketing Context
Mr. Xi Zhang
PhD Candidate in Marketing
J. Mack Robinson College of Business
Georgia State University
The rise of new media is helping marketers evolve from digital to interactive marketing, which facilitates a two-way communication between marketers and customers without intruding on their privacy. However, while research has examined the drivers of customers’ opt-in and opt-out decisions, it has investigated neither the timing of the two decisions nor the influence of transactional activity on the length of time a customer stays with an e-mail program. In this study, the authors adopt a multivariate copula model using a pair-copula construction method to jointly model opt-in time (from a customer’s first purchase to the opt-in decision), opt-out time (from the opt-in decision to the opt-out decision), and average transaction amount. Through such multivariate dependences, this model significantly improves the predictive performance of the opt-out time in comparison with several benchmark models. The study offers several important findings: (1) marketing intensity affects opt-in and opt-out times, (2) customers with certain characteristics are more or less likely to opt in or opt out, and (3) firms can extend customer opt-out time and increase customer spending level by strategically allocating resources.