Structured Neural Network Techniques for Modeling Loyalty and Profitability

Customer satisfaction and customer loyalty are related to key measures of financial performance for firms. The ability to find key drivers for predicting loyalty and profitability is an important step in developing marketing strategies that lead to high quality, long-term relationship with customers. Traditional techniques for modeling the network of causeand-effect relationships related to loyalty and profitability such as structural equation models and partial least squares lack the capability of fitting the nonlinear and asymmetric relationships naturally existing in the loyalty-profitability network. This article presents a new technique namely structured Neural Network (SNN) technique for modeling loyalty and profitability and demonstrates an application for a chemical company.