Analysis of Customer Journeys Using Prototype Detection and Counterfactual Explanations for Sequential Data

TL;DR

This paper introduces a three-step method for analyzing customer journeys using sequence similarity, purchase prediction, and counterfactual explanations to enhance marketing strategies.

Contribution

It presents a novel approach combining sequence analysis, purchase likelihood prediction, and counterfactual explanations for customer journey analysis.

Findings

Identified and visualized representative customer sequences.

Detected sequence parts critical for purchase decisions.

Demonstrated the approach's potential to improve marketing activities.

Abstract

Recently, the proliferation of omni-channel platforms has attracted interest in customer journeys, particularly regarding their role in developing marketing strategies. However, few efforts have been taken to quantitatively study or comprehensively analyze them owing to the sequential nature of their data and the complexity involved in analysis. In this study, we propose a novel approach comprising three steps for analyzing customer journeys. First, the distance between sequential data is defined and used to identify and visualize representative sequences. Second, the likelihood of purchase is predicted based on this distance. Third, if a sequence suggests no purchase, counterfactual sequences are recommended to increase the probability of a purchase using a proposed method, which extracts counterfactual explanations for sequential data. A survey was conducted, and the data were analyzed; the results revealed that typical sequences could be extracted, and the parts of those sequences important for purchase could be detected. We believe that the proposed approach can support improvements in various marketing activities.