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http://dx.doi.org/10.5351/CKSS.2011.18.6.687

Customer Lifetime Value Model Using Segment-Based Survival Analysis  

Chun, Heui-Ju (Department of Data Management, Pusan University of Foreign Studies)
Publication Information
Communications for Statistical Applications and Methods / v.18, no.6, 2011 , pp. 687-696 More about this Journal
Abstract
Customer Lifetime or Customer Lifetime Value is a essential metric of differentiated CRM marketing and differentiated marketing strategy as a company core competency. However, customer lifetime used in companies is easily obtained from a confined simple customer attrition rate at some specific time point regardless of customer characteristics. In this study, in order to overcome the constraints of previous simple methods and to make practical use of it in industries, we suggest a method that estimates a customer lifetime using a customer segment based survival analysis with the censored data of customers; in addition, we apply this method to A mobile telecom company data. A method using customer segment based survival analysis is suggested in this study 1) includes all customers having different subscription dates, 2) reduces individual error, 3) can reflect trends after the observed time point and is more realistic.
Keywords
Customer Lifetime Value(CLV); lifetime; censored data; survival analysis;
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Times Cited By KSCI : 1  (Citation Analysis)
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