Personalized Customer Engagement Considering User Blocking of Individualized Communication Channels

Project: Research

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Modern Information Technology allows for the creation of individualized channels to interact with customers, such as instant messaging, mobile apps, and social media accounts. These channels allow firms to distribute personalized (promotional) messages, which are shown effective in influencing customers. However, sending intrusive marketing messages through individualized channels also faces a risk of damaging customer relationships and leads to the customers blocking future communications from the firm. Many of us may have experience in hanging up on telemarketers, blocking app notifications, or unfollowing social media accountsin daily life. Considering the fragility of individualized communication channels, it is necessary for firms to optimize their customer engagement activities to balance short-term economic returns and long-term customer relations. On the road to address this problem, two issues were insufficiently studied in the literature: 1) How individual customers bonding with a firm is affected by the personalized promotional activities to customers, especially in mobile and social marketing contexts. 2) How to develop a strategy on customer engagement activities to generate a higher value of customers considering the possibility of blocked communications. In viewing these gaps in the literature, this project plans to leverage real-world data to examine the blocking of communication channels in mobile apps and social network contexts, which may be affected by the frequency, timing, style, and product of promotional messages. In the process, the project will consider the heterogeneity of customers, who may have oppositeresponses to the same engagement activity. Then the project will build a stochastic optimization model and design an appropriate algorithm to optimize for a firm’s long-term return. The proposed algorithms and models can be evaluated with simulations and experiments. From a theoretical perspective, the proposed research will deepen our understanding of the stability of individualized communication channels between customers and firms. From a practical perspective, the strategies and algorithms delivered in the research would be useful to modern firms conducting personalized customer advertising. In particular, as an international finance center striving to be a success in the big data era, Hong Kong has many financial firms that highly rely on IT-based communication channels to engage with their heterogeneous customers around the world. The findings of the study will be useful for their long-term success. In addition, the development of the pandemic has led to rapid growth of online services in Hong Kong and worldwide. The findings of this project will also be useful to such new (and small) online firms in managing their relations with customers who are becoming more and moresensitive to intrusive communications. 


Project number9043421
Grant typeGRF
Effective start/end date1/09/22 → …