Pervasive application of data mining technology is very important in analytical CRM software development when the distributed data warehouse is constructed. We propose a multi-factor customer classification evaluation model CLV/CL/CC which comprehensively considers customer lifetime value, customer loyalty and customer credit. It classifies clients with synthetic data mining algorithms. In this...

Since the early 1980s, the concept of relationship management in marketing area has gained its importance. Acquiring and retaining the most profitable customers are serious concerns of a company to perform more targeted marketing campaigns. For effective customer relationship management, it is important to gather information on customer value. Many researches have been performed to calculate cu...

Decision makers in business industries have seen the change from the old economy to a new economy. The old economy is goods-centred, transaction-based in nature, focused on customer attraction, and product-based thinking whereas the new economy is service-centred, subscription-based in its nature, focused on customer retention, and customer-based thinking. The firm of today has to evaluate its ...

In this article, the author addresses the question of how a firm’s acquisition efforts influence the composition of the customer portfolio. The first part of the research is a conceptual model that illustrates how customer uncertainty provides an explanation for why promotionally acquired customers have lower repurchase rates and smaller lifetime values. The second part of the research involves...

Business executives can answer such questions by focusing on customer equity—the total of the discounted lifetime values of all the firm’s customers. A strategy based on customer equity allows firms to trade off between customer value, brand equity, and customer relationship management. We have developed a new strategic framework, the Customer Equity Diagnostic, that reveals the key drivers inc...

INTRODUCTION The lifetime value of a customer is an important and useful concept in interactive marketing. Courtheaux (1986) illustrates its usefulness for a number of managerial problems—the most obvious if not the most important being the budgeting of marketing expenditures for customer acquisition. It can also be used to help allocate spending across media (mail vs. telephone vs. television)...

The shareholder value and the customer lifetime value approach are conceptually and methodically analogous. Both concepts calculate the value of a particular decision unit by discounting the forecasted net cash flows by the risk-adjusted cost of capital. However, virtually no scholarly attention has been devoted to the question if any of the components of the shareholder value could be determin...

Central to a firm’s growth and marketing policy is the revenue and profit potential of its customer assets. As a result, there has been a recent proliferation of work regarding customer lifetime value. However, extant research in this area is silent regarding how to assess the profitability of customers in a networked setting. In such settings, the presence of one type of customer can affect th...