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https://doi.org/10.21256/zhaw-1899| Title: | Modelling customer lifetime value in contractual settings |
| Authors : | Heitz, Christoph Dettling, Marcel Ruckstuhl, Andreas |
| Published in : | International Journal of Services Technology and Management |
| Volume(Issue) : | 16 |
| Issue : | 2 |
| Pages : | 172 |
| Pages to: | 190 |
| Publisher / Ed. Institution : | Inderscience Publishers |
| Issue Date: | 2011 |
| Language : | Englisch / English |
| Subjects : | Markov chain model; Direct marketing; Newspaper subscription; Customer dynamics |
| Subject (DDC) : | 658.8: Marketingmanagement |
| Abstract: | Service provision is often governed by a contract (e.g., newspaper subscriptions, phone contracts, and credit agreements). Typically, such a contract includes rules that influence the dynamics of the customer in the marketplace. Typical examples are minimum contract durations, or fixed time instants for contract termination. The goal of these rules is to increase the future total profit gained from the customer, which is usually denoted with the term customer lifetime value (CLV). We analyse the problem of calculating the CLV under general contract structures. We show that classical Markov models for describing the customer dynamics are not appropriate and may lead to huge errors in the CLV. We propose a semi-Markov formulation which leads to substantially better results. We apply the framework to data of newspaper subscription. |
| Departement: | School of Engineering |
| Organisational Unit: | Institut für Datenanalyse und Prozessdesign (IDP) |
| Publication type: | Beitrag in wissenschaftlicher Zeitschrift / Article in scientific Journal |
| Type of review: | Peer review (Publikation) |
| DOI : | 10.1504/IJSTM.2011.042595 10.21256/zhaw-1899 |
| ISSN: | 1460-6720 |
| URI: | https://digitalcollection.zhaw.ch/handle/11475/4429 |
| License (according to publishing contract) : | Lizenz gemäss Verlagsvertrag / Licence according to publishing contract |
| Appears in Collections: | Publikationen School of Engineering |
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| File | Description | Size | Format | |
|---|---|---|---|---|
| 2011_Heitz_Modelling customer lifetime value_IJSTM.pdf | 567.84 kB | Adobe PDF |  View/Open |
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