customer segmentation using clv elements客户细分使用clv元素.pdfVIP

Journal of Service Science and Management, 2011, 4, 284-290 doi:10.4236/jssm.2011.43034 Published Online September 2011 (http://www.SciRP.org/journal/jssm) Customer Segmentation Using CLV Elements Mitra Bokaei Hosseni, Mohammad Jafar Tarokh Information Technology Group, Industrial Engineering Department, K. N. Toosi University of Technology, Tehran, Iran. Email: mitra.bokai@sina.kntu.ac.ir, mjtarokh@kntu.ac.ir Received June 22nd, 2011; revised July 28th, 2011; accepted August 4th, 2011. ABSTRACT To have an effective customer relationship management, it is essential to have information about the different segments of the customers and predict the future profit of them. For this reason companies can use customer lifetime value that consists of three factors-current value of customers, potential value, and customer churn. Potential value of customers focuses on the cross-selling opportunities for current customers. Therefore , cross selling models are built on the total customers of the database that is not interesting. To overcome this, we presented a framework that estimates the current value and churn probability for the customers and then segmented them base on these two elements and select the most profitable segment for the cross-selling models. In this study we predict the customer churn base on logistic regression as a case study on the insurance database. Keywords : CRM, Customer Lifetime Value, Churn Prediction, Cross-selling, Logistic Regression 1. Introduction them had specific characteristics that were suitable for special industry. The usage of these models also depends Life insurance is become one of the popular insurances in on the available data about that industry. Customer value recent yea