Customer Valuation Through Data Mining
Author(s)
C. Fernando Nogueira & N. F. F. Ebecken
Abstract
In this study, a comprehensive assessment of a variety of customer contribution
components is done, whereby the appropriate approach or its close alternatives
are applied to the large number of parameters that drive customer value.
Apart from the measurable actual contributions, represented by each
customer’s current portfolio of products and services, and the company’s costs to
provide and deliver them, the potential contribution is discussed, from a
marketing standpoint, and considered through a data mining approach.
As a Managerial Information System, the proposed individual customer
valuation methodology is driven to support concrete decisions, thereby
differentiating it from a simple P&L (Profits and Losses) split, among customers.
The proposed methodology is implemented in a real customer base sample,
allowing the measurement of benefits it would effectively capture.
1 Introduction
Everyday, new Customers cost more to be acquired. On the other hand, the
actual offer has a tendency to devaluate, due to the effects of the competition
imposed by the markets maturity Gensch et al. [1].
Managing customers, and not just Products, means the possibility of
rationalizing the companies functions, in order to better explore their source of
survival, which for a long time considered being their products. They could try to
sell more, to customers that potentially could have superior profiles of use, or
better for those that are a priority to keep, being less profitable or more attentive,
for example. Companies can also proactively establish stronger and lasting ties
with the right Customers.
\“CRM strategies and technologies are designed to help organizations build
profitable relationships with customers through the collection and dissemination
of actionable customer insight across the company. CRM assists in recognizing
Keywords
Related Book
Other papers in this volume
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