The impact of customer clubs on lifetime value of banking customers
by Mohaddese Arjmand; Neda Abdolvand; Saeedeh Rajaei Harandi
International Journal of Electronic Customer Relationship Management (IJECRM), Vol. 14, No. 1, 2023

Abstract: Today, with the abundance of private banks, state-owned banks and financial and credit institutions, banks are trying to satisfy customers more than ever in order to be preferred by them. In this regard, they use customer clubs as a communication network to improve their up-selling, cross-selling and word of mouth marketing. Therefore, this study aims to investigate the short-term impact of customer clubs on the lifetime value of customers as one of the most important indicators that reflects customer satisfaction, loyalty and thereby financial gain. To this end, the RFM model was used for clustering customers based on their behaviours. Then customers' lifetime value for each cluster was calculated in four periods. The state transition probability matrix of a Markov chain was also used to analyse the customers' transitions and change in their values through the seasons. The results indicated that customers' lifetime value and the number of profitable customers increased in the last period in which the customer club was used.

Online publication date: Wed, 24-May-2023

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