Customer segmentation and strategy development based on customer lifetime value: A case study

The more a marketing paradigm evolves, the more long-term relationship with customers gains its importance. CRM, a recent marketing paradigm, pursues long-term relationship with profitable customers. It can be a starting point of relationship management to understand and measure the true value of cu...

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Bibliographic Details
Published in:Expert systems with applications 2006-07, Vol.31 (1), p.101-107
Main Authors: Kim, Su-Yeon, Jung, Tae-Soo, Suh, Eui-Ho, Hwang, Hyun-Seok
Format: Article
Language:English
Subjects:
Customer lifetime value
Customer segmentation
Data mining
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Summary:The more a marketing paradigm evolves, the more long-term relationship with customers gains its importance. CRM, a recent marketing paradigm, pursues long-term relationship with profitable customers. It can be a starting point of relationship management to understand and measure the true value of customers since marketing management as a whole is to be deployed toward the targeted customers and profitable customers, to foster customers' full profit potential. Corporate success depends on an organization's ability to build and maintain loyal and valued customer relationships. Therefore, it is essential to build refined strategies for customers based on their value. In this paper, we propose a framework for analyzing customer value and segmenting customers based on their value. After segmenting customers based on their value, strategies building according to customer segment will be illustrated through a case study on a wireless telecommunication company.
ISSN:0957-4174
1873-6793
DOI:10.1016/j.eswa.2005.09.004