Title: Using CLV for modelling churn and customer retention

Authors: Najmeh Abedzadeh; MohammadAli Nematbakhsh

Addresses: Department of Computer Engineering, University of Isfahan, 81746-73441, Iran. ' Department of Computer Engineering, University of Isfahan, 81746-73441, Iran

Abstract: Preventing customer churn and trying to retain customers is the main object of customer churn management. This paper proposes a model to measure churn probability and introduces a policy to retain customers. Using existing datasets of customers, we calculated CLV and used the C5.0 technique to predict churn probability for each customer. We also used process mining to find a policy to retain each customer separately. The model was simulated using a supermarket chain (Refah) and the results show the model is performing much better than previous proposed models. A computer result is shown.

Keywords: customer lifetime value; CLV; customer churn; data mining; customer retention; process mining; churn probability; churn management; datasets; customers; C5.0; supermarkets; Refah Chain Stores; Iran; electronic marketing; e-marketing; electronic retailing; e-retailing.

DOI: 10.1504/IJEMR.2012.051017

International Journal of Electronic Marketing and Retailing, 2012 Vol.5 No.2, pp.128 - 146

Accepted: 03 Apr 2012
Published online: 14 Dec 2012 *

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