Applying Decision Trees for Value-Based Customer Relations Management: Predicting Airline Customers Future Values
Journal
Journal of Database Marketing & Customer Strategy Management
ISSN
1741-2439
ISSN-Digital
1741-2447
Type
journal article
Date Issued
2007-01-01
Author(s)
Abstract
This paper outlines a general methodology for the segmentation of customers according to lifetime value and prediction of their future value segments based on demographic and behavioural features. Not only have few previous scientific studies dealt with this question using nonaggregate single-customer data, but also we address the problem using decision trees, which has rarely been done before. Applying our method to customer data from a major European airline produces predictions not only for long-term, middle-term, and short-term customers but also for prospects whose value is difficult to predict because of limited information. Overall, our findings provide marketing managers a means to optimise company customer equity and maximise returns on marketing in the long run.
Language
English
Keywords
customer equity management
decision trees
marketing
HSG Classification
not classified
Refereed
No
Publisher
Palgrave Macmillan
Publisher place
Basingstoke
Volume
14
Number
2
Start page
130
End page
142
Pages
13
Subject(s)
Division(s)
Eprints ID
38264