Damla ASLAN, METEHAN TOLON

Comparing Customer Segmentation With CLV Using Data Mining and Statistics: A Case Study

Customer segmentation is an essential activity for marketing executives. To penetrate to target market, they should analyze their clients very well. Undoubtfully customer lifetime value (CLV) is a compact calculation method to understand customer behaviors and their values. Various models are presented for CLV interpretation in literature. Two of them are statistical hypothesis tests and k-means. This case study provides the comparison these methods for a B2B IT company. The methodology can easily be used for similar purposes in other organizations. The successful clusters are obtained by k-means application.

PDF

___

Aksoy, L., Keiningham, T. L., Bejou, D., (2008). Objectives of Customer Centric Approaches in Relationship Marketing, Journal of Relationship Marketing, 6(3-4), 1-8.

Baş, M., Tolon, M., Aktepe, C., (2015). “Müşteri İlişkileri Yönetimi”, 3rd Edition, Detay Yayıncılık.

Benoit, D. F., Poel, D., (2009). Benefits of Quantile Regression for the Analysis of Customer Lifetime Value in a Contractual Setting: An Application in Financial Services, Expert Systems with Applications, 36, 10475-10484.

Berger, P. D., Nasr, N., (1998). Customer Lifetime Value: Marketing Models and Applications, Journal of Interactive Marketing, 12(1).

Berger, P. D., Nasr, N., (2001). The Allocation of Promotion Budget to Maximize Customer Equity, The International Journal of Management Science, Omega 29, 49-61.

Berger, P. D., Eechambadi, N., George, M., Lehmann, D. R., Rizley, R., Venkatesan, R., (2006). From Customer Lifetime Value to Shareholder Value, Journal of Service Research, 9(2), 156-167.

Blattberg, R. C., Malthouse, E. C., Neslin, S. A., (2009). Customer Lifetime Value: Empirical Generalizations and Some Conceptual Questions, Journal of Interactive Marketing, 23, 157-168.

Chan, S. L., Ip, W. H., Cho, V., (2010). A Model for Predicting Customer Value From Perspectives of Product Attractiveness and Marketing Strategy, Expert Systems with Applications, 37, 1207-1215.

Cheng, C. J., Chiu, S. W., Cheng, C. B., Wu, J. Y., (2012). Customer Lifetime Value Prediction by A Markov Chain Based Data Mining Model: Application to An Auto Repair and Maintenance Company in Taiwan, Scientia Iranica E, 19 (3), 849-855.

Chen, C., Chen, C., (2014). The Effect of Higher Education Brand Images on Satisfaction and Lifetime Value from Students’ Viewpoint, Anthropologist, 17(1), 137-145.

Clempner, J. B., Poznyak, A. S., (2014). Simple Computing of The Customer Lifetime Value: A Fixed Local-Optimal Policy Approach, J Syst Sci Syst Eng, , Systems Engineering Society of China and Springer, Verlag Berlin Heidelberg.

Cox, D. R., (1972). Regression Models and Life-Tables, Journal of the Royal Statistical Society. Series B (Methodological), 34(2), 187-220.

Çalhan, H., Çakıcı, A. C., Karamustafa, K., (2012). Müşteri Değeri, Müşteri Sermayesi ve Otel Performansı İlişkisi Üzerine Kavramsal Bir Değerlendirme, Sosyal Bilimler Enstitüsü Dergisi, 33(2), 87-120.

Dwyer, F. R., (1989). Customer Lifetime Valuation to Support Marketing Decision Making, Journal of Direct Marketing, 3(4), 8-15.

Glady, N., Baesens, B., Croux, C., (2009). A Modified Pareto/NBD Approach for Predicting Customer Lifetime Value, Expert Systems with Applications, 36, 2062-2071.

Glady, N., Baesens, B., Croux, C., (2009). Modeling Churn Using Customer Lifetime Value, Europian Journal of Operational Research, 197, 402-411.

Gloy, B. A., Akridge, J. T., Preckel, P. V., (1997). Customer Lifetime Value: An Application in the Rural Petroleum Market, Agribusiness, 13(3), 335-347.

Gupta, S., Hanssens, D., Hardie, B., Kahn, W., Kumar, V., Lin, N., Sriram, N. R. S., (2006). Modeling Customer Lifetime Value, Journal of Service Research, 9(2), 139-155.

Gupta, S., Lehmann, D. R., (2006). Customer Lifetime Value and Firm Valuation, Journal of Relationship Marketing, 5(2-3), 87-110.

Haenlein, M., Kaplan, A. M., Beeser, A. J., (2007). A Model to Determine Customer Lifetime Value in a Retail Banking Context, European Management Journal, 25(3), 221-234.

Hoekstra, J. C., Huizingh, E. K. R. E., (1999). The Lifetime Value Concept in Customer-Based Marketing, Journal of Market Focused Management, 3, 257-274.

Hwang, H., Jung, T., Suh, E., (2004). An LTV Model and Customer Segmentation Based On Customer Value: A Case Study on the Wireless Telecommunication Industry, Expert Systems with Applications, 26, 181-188.

Kahreh, M. S., Tive, M., Babania, A., Hesan, M., (2014). Analyzing the Applications of Customer Lifetime Value (CLV) Based On Benefit Segmentation For the Banking Sector, Procedia-Social and Behavioral Sciences, 109, 590-594.

Keane, T. J., Wang, P., (1995). Applications for the Lifetime Value Model in Modern Newspaper Publishing, Journal of Direct Marketing, 9(2), Spring, John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc.

Khajvand, M., Zolfaghar, K., Ashoori, S., Alizadeh, S., (2011). Estimating Customer Lifetime Value Based on RFM Analysis of Customer Purchase Behavior: Case Study, Procedia Computer Science, 3, 57-63.

Kim, S., Jung, T., Suh, E., Hwang, H., (2006). Customer Segmentation and Strategy Development Based On Customer Lifetime Value: A Case Study, Expert Systems with Applications, 31, 101-107.

Kotler, P., (2002). Marketing Management, Millenium Edition, Custom Edition for University of Phoenix, 10th Edition, Pearson Custom Publishing.

Kumar, V., (2010). A Customer Lifetime Value-Based Approach to Marketing in The Multichannel, Multimedia Retailing Environment, Journal of Interactive Marketing, 24, 71-85.

Liu, D., Shih, Y., (2005). Hybrid Approaches to Product Recommendation Based on Customer Lifetime Value and Purchase Preferences, The Journal of Systems and Software, 77, 181-191.

Liu, D., Shih, Y., (2005). Integrating AHP and Data Mining for Product Recommendation Based On Customer Lifetime Value, Information & Management, 42, 387-400.

Mani, D. R., Drew, J., Betz, A., Datta, P., (1999). Statistics and Data Mining Techniques for Lifetime Value Modeling, KDD-99, San Diego, CA, USA, ACM, 1-58113-143-7/99/08.

Nenonen, S., Storbacka, K., (2016). Driving Shareholder Value with Customer Asset Management: Moving Beyond Customer Lifetime Value, Industrial Marketing Management, 52, 140-150.

Paauwe, P., Putten, P., Wezel, M., (2007). DTMC: An Actionable e-Customer Lifetime Value Model Based on Markov Chains and Decision Trees, ICEC’07, August 19-22, Minneapolis, Minnesota, USA.

Rosset, S., Neumann, E., Eick, U., Vatnik, N., (2003). Customer Lifetime Value Models for Decision Support, Data Mining and Knowledge Discovery, 7, 321-339.

Shih, Y., Liu, D., (2008). Product Recommendation Approaches: Collaborative Filtering via Customer Lifetime Value and Customer Demands, Expert Systems with Applications, 35, 350-360.

Venkatesan, R., Kumar, V., (2004). A Customer Lifetime Value Framework for Customer Selection and Resource Allocation Strategy, Journal of Marketing, 68(4), 106-125.

Yapraklı, Ş., Keser, E., (2008). Serbest Muhasebecilik ve Serbest Muhasebeci Mali Müşavirlik Sektöründe Yaşam Boyu Değerinin Hesaplanması Üzerine Bir Saha Araştırması, Ankara Üniversitesi SBF Dergisi, 64-2, 185-212.

Yılmaz, S., Büyüklü, A. H., (2009). Yaşam Boyu Müşteri Değeri Modellemesi Üzerine Bir Örnek Uygulama, FBE İstatistik Anabilim Dalı İstatistik Programı, Master Thesis, Yıldız Teknik Üniversitesi Fen Bilimleri Enstitüsü, İstanbul.

Zhang, H., Liang, X., Wang, S., (2016). Customer Value Anticipation, Product Innovativeness, and Customer Lifetime Value: The Moderating Role of Advertising Strategy, Journal of Business Research, 69, 3725-3730.