Customer Relationship Management and Knowledge Discovery in Database

Customer Relationship Management and Knowledge Discovery in Database

Jounghae Bang (Kookmin University, Korea), Nikhilesh Dholakia (University of Rhode Island, USA), Lutz Hamel (University of Rhode Island, USA) and Seung-Kyoon Shin (University of Rhode Island, USA)
DOI: 10.4018/978-1-60566-058-5.ch107
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Abstract

Customer relationships are increasingly central to business success (Kotler, 1997; Reichheld & Sasser, 1990). Acquiring new customers is five to seven times costlier than retaining existing customers (Kotler, 1997). Simply by reducing customer defections by 5%, a company can improve profits by 25% to 85% (Reichheld & Sasser, 1990). Relationship marketing—getting to know customers intimately by understanding their preferences—has emerged as a key business strategy for customer retention (Dyche, 2002). Internet and related technologies offer amazing possibilities for creating and sustaining ideal customer relationships (Goodhue, Wixom, & Watson, 2002; Ives, 1990; Moorman, Zaltman, & Deshpande, 1992). Internet is not only an important and convenient new channel for promotion, transactions, and business process coordination; it is also a source of customer data (Shaw, Subramaniam, Tan, & Welge, 2001). Huge customer data warehouses are being created using advanced database technologies (Fayyad, Piatetsky-Shapiro, & Smyth, 1996).

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