Retention campaigns in customer relationship management often rely on churn prediction models evaluated using traditional metrics such as AUC and F1-score. However, these metrics fail to reflect financial outcomes and may mislead strategic decisions. We introduce e-Profits, a novel business-aligned evaluation metric that quantifies model performance based on customer lifetime value, retention probability, and intervention costs. Unlike existing profit-based metrics such as Expected Maximum Profit, which assume fixed population-level parameters, e-Profits uses Kaplan-Meier survival analysis to estimate tenure-conditioned (customer-level) one-period retention probabilities and supports granular, per-customer profit evaluation. We benchmark six classifiers across two telecom datasets (IBM Telco and Maven Telecom) and demonstrate that e-Profits reshapes model rankings compared to traditional metrics, revealing financial advantages in models previously overlooked by AUC or F1-score. The metric also enables segment-level insight into which models maximise return on investment for high-value customers. e-Profits provides a transparent, customer-level evaluation framework that bridges pred
Profit Maximization is one of the key objectives for social media marketing, where the task is to choose a limited number of highly influential nodes such that their initial activation leads to maximum profit. In this paper, we introduce a variant of the Profit Maximization Problem where we consider that instead of nodes, benefits are assigned to some of the motifs of the graph, and these benefit values can be earned once a given threshold count of nodes from the motifs is influenced. The goal here is to choose a limited number of nodes for initial activation called seed nodes such that the motif-oriented profit gets maximized. Formally, we call our problem the Motif Oriented Profit Maximization Problem. We show that the problem is NP-hard to solve optimally. We propose a Reverse Reachable Set-based framework to solve our problem. The proposed methodology broadly divides into three steps: KPT Estimation and RR Set generation, Seed Set Selection, and Motif Oriented Profit Estimation. The proposed methodology has been analyzed to understand its time and space requirements. It has been implemented with real-world social network datasets, and the results are reported. We observe that t
Contents Preface PART I: THE SERVICE PROFIT CHAIN A RATIONALE FOR EXCELLENCE 1. Setting the Record Straight A World of Misleading Advice Too Much Advice out of Context The Tyranny of the Tradeoff Emphasis on Symptoms vs. Causes The Trivialization of Service Fixation on Service Process Quality The Service Profit Chain and Our Search for Evidence Heskett and the Strategic Service Vision Sasser and Customer Loyalty Schlesinger and Determinants of Employee and Customer Loyalty The Service Profit Chain The Centrality of Value Quality as One Element of Value Price Results, Costs, Price, Value, and Profit Relationship to Service Profit Chain What Difference Does It Make? Spreading the Word 2. Capitalizing on the Service Profit Chain The Service Profit Chain Managing for Results at Southwest Airlines and American Express Profit and Growth Are Linked to Customer Loyalty Customer Loyalty Is Linked to Customer Customer Is Linked to Service Value Service Value Is Linked to Employee Productivity Employee Productivity Is Linked to Loyalty Employee Loyalty Is Linked to Employee Employee Is Linked to Internal Quality of Work Comprehensively Relating Links in the Chain Implications of the Service Profit Chain for Management Measuring Across Operating Units Communicating Results of the Self-Appraisal Developing a Designing Efforts to Enhance Performance Tying Recognition and Rewards to Measures Communicating Results Encouraging Internal Exchanges Questions for Management Getting on with the Job: An Important Caveat 3. Managing by the Customer Value Equation The Customer Value Equation Results Produced for Customers Process Quality Price and Acquisition Costs Customer Value Equation Relationships Managing by the Customer Value Equation: What It Requires USAA British Airways Requirements of Those Who Manage by the Customer Value Equation Linking the Strategic Service Vision and the Service Profit Chain Questions for Management PART II: BUILDING PROFIT CHAIN CAPABILITY 4. Rethinking Marketing: Building Customer Loyalty Defining the Marketing: Adding the Three Rs to the Four Ps Estimating the Lifetime Value of a Customer Retention Related Sales of New Products and Services Referrals Managing by the Three Rs Measuring and Communicating the Lifetime Value of Customers Identifying, Creating, and Enhancing Listening Posts Recognizing and Creating Incentives to Build Customer Loyalty Utilizing Customer Defections as Learning Opportunities Potential-Based Marketing Identifying Share of Loyal Customers Calculating Economic Impact of Customer Behavior Change Lengthening Customer Relationships Overall Impact of Potential-based Marketing Implementing a Potential-based Marketing Effort Mining Customer Data to Achieve Mass Customization Achieving Mass Customization on a Vertical Data base Achieving Mass Customization on a Horizontal Data base Organizational Implications of the New Marketing Questions for Management 5. Attaining Customer Satisfaction: Not Whether but When The Xerox The Customer Imperative Relationship of Customer and Loyalty Relationship of Customer and Profitability for Captive Customers The Importance of Focus The Tyranny of Averages Satisfying Targeted Segments The Ultimate Source of Focus: Affinity Groups Measuring Customer and Loyalty Customer Surveys Customer Feedback Marketing Research Feedback from Frontline Personnel Complementarity of Methods Addressing Customer at the Limits: Apostles and Terrorists The Economics of the Extreme Investing in Existing versus New Customers Creating Terrorists as a By-Product of Focus Meanwhile, Back at Xerox Questions for Management Understanding Determinants of Customer 6. Managing the Customer-Employee Satisfaction The Service Encounter Evidence of the Satisfaction Why the Mirror Occurs Preventing Cracks in the Mirror From Service Encounter to Relationship Factors Creating the Successful Service Encounter Achieving Consistency in Service Encounters Enlisting the Customer in Relationship Building Engineering an Organization for Customer Relationships Developing the Service Relationship Triangle Identifying Relationship-Critical Jobs Dedicated Servers or Not? Service Teams or Not? Questions for Management 7. Building a Cycle of Capability Frontline Frustration Capability Defined Hiring for Attitudes First, Skills Second The Bugs Burger Method Selection by Life Themes Substituting Self-Selection for Selection Involving Customers in the Process Serving Customers Who Qualify Designing Training as Both Ends and Means Providing Latitude and Limits The Traditional View The Nontraditional View Investing in Support Systems Information and Communication Technology Facilities Methods and Materials Field Quality Control Safety Nets Service Guarantees Latitude to Fire Customers Providing Consistent Reward and Recognition Fitting the Elements Together Questions for Management Concluding Comments 8. Developing Processes That Deliver Value Basic Tenets of Process Design That Yield Value The World's Best Hospital The World's Best Dinner Show Value America's First Deming Prize Winner Formation of Quality Improvement Teams Development of The Process Policy Deployment Quality in Daily Work Important Techniques for Process Improvement Service Mapping Pareto Analyses Cause-and-Effect (Fishbone) Diagramming Other Process Steps Translating Techniques into Results Value Enhancement versus Quality Improvement Process Questions for Management 9. Designing Service Delivery Systems That Drive Quality, Productivity, and Value Developing Single-Facility Service Delivery Systems Planning System Designs for the Right Amount of Employee Latitude Controlling Customer Behavior The Ultimate Customer Control Strategy: Self-Service Managing Information Support Systems to Enhance Customer Loyalty and Sales Providing Process Visibility Preventing Service Errors Developing and Managing Multisite Networks Network Characteristics Factors in Network Design Degree of Support for Operating Strategy Need for Interconnectedness Need for Standardization Latitude Allowed Site Managers: Preserving the Core Delivering Services Globally The Target Market and the Need for Customization Total Experience Services Culturally Sensitive Services Incorporating Franchising into the Strategy Employing Franchisees Enfranchising Employees Questions for Management 10. Attaining Customer Satisfaction: Doing Things Right the Second Time Doing It Right the First and Second Time Getting Customers to Complain: The British Airways The Problem Some Responses External and Internal Service Contracting Customer Service Contracting Internal Service Contracting Supplier Service Contracting Service Guarantees Questions in Guarantee Design What's the Primary Purpose? Internal Guarantees Impact on Suppliers The Economics of Service Guarantees Putting Guarantees in Context Service Recovery: A Case for Capability The Service Recovery Payoff Questions for Management 11. Measuring for Effective Management Estimating the Lifetime Value of a Customer Fitting Measurement to the Business Fitting Measurement to Purpose: Relevance The Xerox The AT&T Universal Card Taking Process into Account Determining the Form in Which Results Will Be Transmitted Other Criteria for Evaluating Measures and Methods Designing the Balanced Scorecard Questions for Management PART III: PUTTING IT ALL TOGETHER 12. Reengineering the Service Organization for Capability: Gains and Pains The Theory of Managing Change Organization Reengineering without a Crisis John Martin and Taco Bell Actions Gains Pains William Bratton and the NYPD Actions Gains Pains Arthur Martinez and Sears Actions Gains Pains Putting Organization Reengineering in Context Applying Cosmetics Picking Movers and Shakers Creating a Sense of Urgency Choosing the Theme and Vehicle Preparing People Getting the Facts Straight and Fast Restructuring the Organization Undertaking New Initiatives Widening the Competitive Gap: Sustaining Effort Observations Questions for Management 13. Leading and Living Service Profit Chain Management Service Profit Chain Leadership at Wal-Mart Service Profit Chain Leadership at Southwest Airlines Leading Service Profit Chain Management What Service Profit Chain Leaders Do: Supplying the Extras Believing in and Communicating the Basics Putting Employees First Investing in Customers Maintaining Measures and Rewards That Influence Behavior Communicating the Message Linking Organization Culture, Performance, and the Service Profit Chain Questions for Management 14. Auditing Service Profit Chain Management Success Leadership = Focus Strategic Service Vision = Positioning, Leverage, and Consistency Service Profit Chain = Value, Satisfaction, and Loyalty Profit Model = Value to Customers versus Costs to Providers Performing the Service Profit Chain Management Audit Identifying the Organizational Limit Assessing Importance Assessing Current Practice Measuring the Gaps Establishing Priorities and Taking Action A Final Word Notes Index About the Authors
We present ProFit, a new code for Bayesian two-dimensional photometric galaxy profile modelling. ProFit consists of a low-level C++ library (libprofit), accessible via a command-line interface and documented API, along with high-level R (ProFit) and Python (PyProFit) interfaces (available at github.com/ICRAR/ libprofit, github.com/ICRAR/ProFit, and github.com/ICRAR/pyprofit respectively). R ProFit is also available pre-built from CRAN, however this version will be slightly behind the latest GitHub version. libprofit offers fast and accurate two- dimensional integration for a useful number of profiles, including Sersic, Core-Sersic, broken-exponential, Ferrer, Moffat, empirical King, point-source and sky, with a simple mechanism for adding new profiles. We show detailed comparisons between libprofit and GALFIT. libprofit is both faster and more accurate than GALFIT at integrating the ubiquitous Serrsic profile for the most common values of the Serrsic index n (0.5 < n < 8). The high-level fitting code ProFit is tested on a sample of galaxies with both SDSS and deeper KiDS imaging. We find good agreement in the fit parameters, with larger scatter in best-fit parameters from fit
This paper investigates the extent of political rent seeking in Hungary in the 2010s. Political capitalism--where powerful private interests influence public policy for private gain--creates opportunities for rent seeking that vary across sectors. The analysis is based on a theoretical model assuming rent seeking occurs in a three-stage process: changes in economic institutions granting regulatory privileges, which are enhanced by political-business networks; this leads to scarcities, and increased market power in certain markets; which then generates rents. To quantify this, the study evaluates Hungarian political capitalism by examining the impact of political decisions on firms' rents, analysing the profit trends of the 1,000 largest Hungarian firms (selected annually by net sales) and comparing their mean profit share (earnings before tax) across two periods: 2008-2012 and 2019-2023. A significant increase in a sector's mean profit share was assumed to indicate increased rent seeking. Using Welch's two-sample t-tests, three sectors were identified as potentially experiencing increased rent seeking: agriculture, construction, and financial and insurance activities. Quantitative
Diffusion of information, innovation, and ideas is an important phenomenon in social networks. Information propagates through the network and reaches from one person to the next. In many settings, it is meaningful to restrict diffusion so that each node can spread information to only a limited number of its neighbors rather than to all of them. Such social networks are called closed social networks. In recent years, social media platforms have emerged as an effective medium for commercial entities, where the objective is to maximize profit. In this paper, we study the Profit Maximization in Closed Social Networks (PMCSN) problem in the context of viral marketing. The input to the problem is a closed social network and two positive integers $\ell$ and $B$. The problem asks to select seed nodes within a given budget $B$; during the diffusion process, each node is restricted to choose at most $\ell$ outgoing links for information diffusion; and the objective is to maximize the profit earned by the seed set. The PMCSN problem generalizes the Influence Maximization problem, which is NP-hard. We propose two solution approaches for PMCSN: a sampling-based approximate solution and a margin
Cyclic arbitrage chances exist abundantly among decentralized exchanges (DEXs), like Uniswap V2. For an arbitrage cycle (loop), researchers or practitioners usually choose a specific token, such as Ether as input, and optimize their input amount to get the net maximal amount of the specific token as arbitrage profit. By considering the tokens' prices from CEXs in this paper, the new arbitrage profit, called monetized arbitrage profit, will be quantified as the product of the net number of a specific token we got from the arbitrage loop and its corresponding price in CEXs. Based on this concept, we put forward three different strategies to maximize the monetized arbitrage profit for each arbitrage loop. The first strategy is called the MaxPrice strategy. Under this strategy, arbitrageurs start arbitrage only from the token with the highest CEX price. The second strategy is called the MaxMax strategy. Under this strategy, we calculate the monetized arbitrage profit for each token as input in turn in the arbitrage loop. Then, we pick up the most maximal monetized arbitrage profit among them as the monetized arbitrage profit of the MaxMax strategy. The third one is called the Convex Op
This paper analyzes the relation between bank profit performance and business models. Using a machine learning-based approach, we propose a methodological strategy in which balance sheet components' contributions to profitability are the identification instruments of business models. We apply this strategy to the European Union banking system from 1997 to 2021. Our main findings indicate that the standard retail-oriented business model is the profile that performs best in terms of profitability, whereas adopting a non-specialized business profile is a strategic decision that leads to poor profitability. Additionally, our findings suggest that the effect of high capital ratios on profitability depends on the business profile. The contributions of business models to profitability decreased during the Great Recession. Although the situation showed signs of improvement afterward, the European Union banking system's ability to yield returns is still problematic in the post-crisis period, even for the best-performing group.
The study takes the social media industry as its research subject and examines the impact of scientific innovation capabilities on profit distribution within the value chain of the social media industry. It proposes a specific solution to the profit distribution problem using an improved Shapley value method. Additionally, the AHP (Analytic Hierarchy Process) is employed to evaluate the profit distribution model, allowing the improved Shapley value method to better address the issue of profit allocation within the value chain of the social media industry. This approach ensures that each member receives a fair share of the profits, fostering strong cooperative relationships among members. Moreover, it compensates for the shortcomings of the traditional Shapley value method in addressing such problems to a certain extent.
We consider islamic Profit and Loss (PL) sharing contract, possibly combined with an agency contract, and introduce the notion of {\em $c$-fair} profit sharing ratios ($c = (c_1, \ldots,c_d) \in (\mathbb R^{\star})^d$, where $d$ is the number of partners) which aims to determining both the profit sharing ratios and the induced expected maturity payoffs of each partner $\ell$ according to its contribution, determined by the rate component $c_{\ell}$ of the vector $c$, to the global success of the project. We show several new results that elucidate the relation between these profit sharing ratios and various important economic factors as the investment risk, the labor and the capital, giving accordingly a way of choosing them in connection with the real economy. The design of our approach allows the use of all the range of econometrics models or more general stochastic diffusion models to compute or approximate the quantities of interest.
We examine two types of binary betting markets, whose primary goal is for profit (such as sports gambling) or to gain information (such as prediction markets). We articulate the interplay between belief and price-setting to analyse both types of markets, and show that the goals of maximising bookmaker profit and eliciting information are fundamentally incompatible. A key insight is that profit hinges on the deviation between (the distribution of) bettor and true beliefs, and that heavier tails in bettor belief distribution imply higher profit. Our algorithmic contribution is to introduce online learning methods for price-setting. Traditionally bookmakers update their prices rather infrequently, we present two algorithms that guide price updates upon seeing each bet, assuming very little of bettor belief distributions. The online pricing algorithm achieves stochastic regret of $\mathcal{O}(\sqrt{T})$ against the worst local maximum, or $ \mathcal{O}(\sqrt{T \log T}) $ with high probability against the global maximum under fair odds. More broadly, the inherent trade-off between profit and information-seeking in binary betting may inspire new understandings of large-scale multi-agent
The fine-tuning of pre-trained models has become ubiquitous in generative AI, computer vision, and robotics. Although much attention has been paid to improving the efficiency of fine-tuning model, there has been less scholarship around fine-tuning specifically for improved model performance. To remedy this gap, we present PROFIT, one of the first optimizers designed to incrementally fine-tune converged models on new tasks and/or datasets. Unlike traditional optimizers such as SGD or Adam, which make minimal assumptions due to random initializations, PROFIT takes the properties of a converged model into account explicitly to regularize the optimization process. Employing a temporal gradient-orthogonalization process, PROFIT outperforms fine-tuning methods in various tasks, from image classification to multimodal language model training to large-scale motion prediction. Moreover, PROFIT is encapsulated as a modular optimizer, which makes it easy to integrate directly into any training pipeline with minimal engineering effort.
To examine the relation between profitability and business models (BMs) across bank sizes, the paper proposes a research strategy based on machine learning techniques. This strategy allows for analyzing whether size and profit performance underlie BM heterogeneity, with BM identification being based on how the components of the bank portfolio contribute to profitability. The empirical exercise focuses on the European Union banking system. Our results suggest that banks with analogous levels of performance and different sizes share strategic features. Additionally, high capital ratios seem compatible with high profitability if banks, relative to their size peers, adopt a standard retail BM.
We study the coordination of actions and the allocation of profit in supply chains under decentralized control in which a single supplier supplies several retailers with goods for replenishment of stocks. The goal of the supplier and the retailers is to maximize their individual profits. Since the outcome under decentralized control is inefficient, cooperation among firms by means of coordination of actions may improve the individual profits. Cooperation is studied by means of cooperative game theory. Among others we show that the corresponding games are balanced and we propose a stable solution concept for these games.
In a ride-pooling system, travellers experience discomfort associated with a detour and a longer travel time, which is compensated with a sharing discount. Most studies assume travellers receive either a flat discount or, in rare cases, a proportional to the inconvenience. We show the system benefits from individually tailored fares. We argue that fares that optimise an expected profit of an operator also improve system-wide performance if they include travellers' acceptance. Our pricing method is set in a heterogeneous population, where travellers have varying levels of value-of-time and willingness-to-share, unknown to the operator. A high fare discourages clients from the service, while a low fare reduces the profit margin. Notably, a shared ride is only realised if accepted by all co-travellers (decision is driven by the latent behavioural factors). Our method reveals intriguing properties of the shareability topology. Not only identifies rides efficient for the system and supports them with reduced fares (to increase their realisation probability), but also identifies travellers unattractive for the system (e.g. due to incompatibility with other travellers) and effectively shi
This study analyses the tax-induced profit shifting behaviour of firms and the impact of governments' anti-shifting rules. We derive a model of a firm that combines internal sales and internal debt in a full profit shifting strategy, and which is required to apply the arm's length principle and a general thin capitalisation rule. We find several cases where the firm may shift profits to low-tax countries while satisfying the usual arm's length conditions in all countries. Internal sales and internal debt may be regarded either as complementary or as substitute shifting channels, depending on how the implicit concealment costs vary after changes in all transactions. We show that the cross-effect between the shifting channels facilitates profit shifting by means of accepted transfer prices and interest rates.
How much has market power increased in the United States in the last fifty years? And how did the rise in market power affect aggregate profits? Using micro-level data from U.S. Compustat, we find that several indicators of market power have steadily increased since 1970. In particular, the aggregate markup has gone up from 10% of price over marginal cost in 1970 to 23% in 2020, and aggregate returns to scale have risen from 1.00 to 1.13. We connect these market-power indicators to profitability by showing that the aggregate profit share can be expressed in terms of the aggregate markup, aggregate returns to scale, and a sufficient statistic for production networks that captures double marginalization in the economy. We find that despite the rise in market power, the profit share has been constant at 18% of GDP because the increase in monopoly rents has been completely offset by rising fixed costs and changes in technology. Our empirical results have subtle implications for policymakers: overly aggressive enforcement of antitrust law could decrease firm dynamism and paradoxically lead to lower competition and higher market power.
International taxation rules are outdated, allowing multinationals to shift profits to tax havens. This paper examines how tax reforms affect profit shifting and cross-country welfare. We propose a model that separates real economic profits from paper profits, introducing 'triangle identities' to estimate bilateral profit-shifting flows. Using macro- and firm-level data, paper profits' elasticity is three times that of the tax base. Global minimum tax reforms improve welfare by increasing public goods funding and reducing tax competition. We also identify optimal minimum rates under various taxing-right scenarios and demonstrate that unilateral destination-based-cash-flow-tax reforms' welfare effects depend highly on trade imbalances.
For a mining strategy we define the notion of "profit lag" as the minimum time it takes to be profitable after that moment. We compute closed forms for the profit lag and the revenue ratio for the strategies "selfish mining" and "intermittent selfish mining". This confirms some earlier numerical simulations and clarifies misunderstandings on profitability in the literature. We also study mining pairs of PoW cryptocurrencies, often coming from a fork, with the same mining algorithm. This represents a vector of attack that can be exploited using the "alternate network mining" strategy that we define. We compute closed forms for the profit lag and the revenue ratiofor this strategy that is more profitable than selfish mining and intermittent selfish mining. It is also harder to counter since it does not rely on a flaw in the difficulty adjustment formula that is the reason for profitability of the other strategies.
We exploit the new country-by-country reporting data of multinational corporations, with unparalleled country coverage, to reveal the distributional consequences of profit shifting. We estimate that multinational corporations worldwide shifted over \$850 billion in profits in 2017, primarily to countries with effective tax rates below 10\%. Countries with lower incomes lose a larger share of their total tax revenue due to profit shifting. We further show that a logarithmic function is better suited for capturing the non-linear relationship between profits and tax rates than linear or quadratic functions. Our findings highlight effective tax rates' importance for profit shifting and tax reforms.