Welcome to the InfoSci Platform
Data Mining for Lifetime Value Estimation

Data Mining for Lifetime Value Estimation

Silvia Figini
Copyright: © 2009 |Pages: 7
ISBN13: 9781605660103|ISBN10: 1605660108|EISBN13: 9781605660110
DOI: 10.4018/978-1-60566-010-3.ch068
Cite Chapter Cite Chapter

MLA

Figini, Silvia. "Data Mining for Lifetime Value Estimation." Encyclopedia of Data Warehousing and Mining, Second Edition, edited by John Wang, IGI Global, 2009, pp. 431-437. https://doi.org/10.4018/978-1-60566-010-3.ch068

APA

Figini, S. (2009). Data Mining for Lifetime Value Estimation. In J. Wang (Ed.), Encyclopedia of Data Warehousing and Mining, Second Edition (pp. 431-437). IGI Global. https://doi.org/10.4018/978-1-60566-010-3.ch068

Chicago

Figini, Silvia. "Data Mining for Lifetime Value Estimation." In Encyclopedia of Data Warehousing and Mining, Second Edition, edited by John Wang, 431-437. Hershey, PA: IGI Global, 2009. https://doi.org/10.4018/978-1-60566-010-3.ch068

Export Reference

Mendeley
Favorite

Abstract

Customer lifetime value (LTV, see e.g. Bauer et al. 2005 and Rosset et al. 2003), which measures the profit generating potential, or value, of a customer, is increasingly being considered a touchstone for administering the CRM (Customer relationship management) process. This in order to provide attractive benefits and retain high-value customers, while maximizing profits from a business standpoint. Robust and accurate techniques for modelling LTV are essential in order to facilitate CRM via LTV. A customer LTV model needs to be explained and understood to a large degree before it can be adopted to facilitate CRM. LTV is usually considered to be composed of two independent components: tenure and value. Though modelling the value (or equivalently, profit) component of LTV, (which takes into account revenue, fixed and variable costs), is a challenge in itself, our experience has revealed that finance departments, to a large degree, well manage this aspect. Therefore, in this paper, our focus will mainly be on modelling tenure rather than value.

Request Access

You do not own this content. Please login to recommend this title to your institution's librarian or purchase it from the IGI Global bookstore.