Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seating
<p>Employing customer information from one of the world's largest airline companies, we develop a price elasticity model (PREM) using machine learning to identify customers likely to purchase an upgrade offer from economy to premium class and predict a customer's acceptable price ran...
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2023
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| _version_ | 1864513529002852352 |
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| author | Saravanan Thirumuruganathan (11038038) |
| author2 | Noora Al Emadi (17860709) Soon-gyo Jung (7434773) Joni Salminen (7434770) Dianne Ramirez Robillos (17860712) Bernard J. Jansen (7434779) |
| author2_role | author author author author author |
| author_facet | Saravanan Thirumuruganathan (11038038) Noora Al Emadi (17860709) Soon-gyo Jung (7434773) Joni Salminen (7434770) Dianne Ramirez Robillos (17860712) Bernard J. Jansen (7434779) |
| author_role | author |
| dc.creator.none.fl_str_mv | Saravanan Thirumuruganathan (11038038) Noora Al Emadi (17860709) Soon-gyo Jung (7434773) Joni Salminen (7434770) Dianne Ramirez Robillos (17860712) Bernard J. Jansen (7434779) |
| dc.date.none.fl_str_mv | 2023-04-01T00:00:00Z |
| dc.identifier.none.fl_str_mv | 10.1016/j.im.2023.103759 |
| dc.relation.none.fl_str_mv | https://figshare.com/articles/journal_contribution/Will_they_take_this_offer_A_machine_learning_price_elasticity_model_for_predicting_upselling_acceptance_of_premium_airline_seating/25097585 |
| dc.rights.none.fl_str_mv | CC BY 4.0 info:eu-repo/semantics/openAccess |
| dc.subject.none.fl_str_mv | Information and computing sciences Information systems Upselling Price elasticity Recommender systems Knowledge engineering Intelligent systems Machine learning |
| dc.title.none.fl_str_mv | Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seating |
| dc.type.none.fl_str_mv | Text Journal contribution info:eu-repo/semantics/publishedVersion text contribution to journal |
| description | <p>Employing customer information from one of the world's largest airline companies, we develop a price elasticity model (PREM) using machine learning to identify customers likely to purchase an upgrade offer from economy to premium class and predict a customer's acceptable price range. A simulation of 64.3 million flight bookings and 14.1 million email offers over three years mirroring actual data indicates that PREM implementation results in approximately 1.12 million (7.94%) fewer non-relevant customer email messages, a predicted increase of 72,200 (37.2%) offers accepted, and an estimated $72.2 million (37.2%) of increased revenue. Our results illustrate the potential of automated pricing information and targeting marketing messages for upselling acceptance. We also identified three customer segments: (1) Never Upgrades are those who never take the upgrade offer, (2) Upgrade Lovers are those who generally upgrade, and (3) Upgrade Lover Lookalikes have no historical record but fit the profile of those that tend to upgrade. We discuss the implications for airline companies and related travel and tourism industries.</p><h2>Other Information</h2> <p> Published in: Information & Management<br> License: <a href="http://creativecommons.org/licenses/by/4.0/" target="_blank">http://creativecommons.org/licenses/by/4.0/</a><br>See article on publisher's website: <a href="https://dx.doi.org/10.1016/j.im.2023.103759" target="_blank">https://dx.doi.org/10.1016/j.im.2023.103759</a></p> |
| eu_rights_str_mv | openAccess |
| id | Manara2_42bc6ea76438f56ec5340285001d176b |
| identifier_str_mv | 10.1016/j.im.2023.103759 |
| network_acronym_str | Manara2 |
| network_name_str | Manara2 |
| oai_identifier_str | oai:figshare.com:article/25097585 |
| publishDate | 2023 |
| repository.mail.fl_str_mv | |
| repository.name.fl_str_mv | |
| repository_id_str | |
| rights_invalid_str_mv | CC BY 4.0 |
| spelling | Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seatingSaravanan Thirumuruganathan (11038038)Noora Al Emadi (17860709)Soon-gyo Jung (7434773)Joni Salminen (7434770)Dianne Ramirez Robillos (17860712)Bernard J. Jansen (7434779)Information and computing sciencesInformation systemsUpsellingPrice elasticityRecommender systemsKnowledge engineeringIntelligent systemsMachine learning<p>Employing customer information from one of the world's largest airline companies, we develop a price elasticity model (PREM) using machine learning to identify customers likely to purchase an upgrade offer from economy to premium class and predict a customer's acceptable price range. A simulation of 64.3 million flight bookings and 14.1 million email offers over three years mirroring actual data indicates that PREM implementation results in approximately 1.12 million (7.94%) fewer non-relevant customer email messages, a predicted increase of 72,200 (37.2%) offers accepted, and an estimated $72.2 million (37.2%) of increased revenue. Our results illustrate the potential of automated pricing information and targeting marketing messages for upselling acceptance. We also identified three customer segments: (1) Never Upgrades are those who never take the upgrade offer, (2) Upgrade Lovers are those who generally upgrade, and (3) Upgrade Lover Lookalikes have no historical record but fit the profile of those that tend to upgrade. We discuss the implications for airline companies and related travel and tourism industries.</p><h2>Other Information</h2> <p> Published in: Information & Management<br> License: <a href="http://creativecommons.org/licenses/by/4.0/" target="_blank">http://creativecommons.org/licenses/by/4.0/</a><br>See article on publisher's website: <a href="https://dx.doi.org/10.1016/j.im.2023.103759" target="_blank">https://dx.doi.org/10.1016/j.im.2023.103759</a></p>2023-04-01T00:00:00ZTextJournal contributioninfo:eu-repo/semantics/publishedVersiontextcontribution to journal10.1016/j.im.2023.103759https://figshare.com/articles/journal_contribution/Will_they_take_this_offer_A_machine_learning_price_elasticity_model_for_predicting_upselling_acceptance_of_premium_airline_seating/25097585CC BY 4.0info:eu-repo/semantics/openAccessoai:figshare.com:article/250975852023-04-01T00:00:00Z |
| spellingShingle | Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seating Saravanan Thirumuruganathan (11038038) Information and computing sciences Information systems Upselling Price elasticity Recommender systems Knowledge engineering Intelligent systems Machine learning |
| status_str | publishedVersion |
| title | Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seating |
| title_full | Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seating |
| title_fullStr | Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seating |
| title_full_unstemmed | Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seating |
| title_short | Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seating |
| title_sort | Will they take this offer? A machine learning price elasticity model for predicting upselling acceptance of premium airline seating |
| topic | Information and computing sciences Information systems Upselling Price elasticity Recommender systems Knowledge engineering Intelligent systems Machine learning |