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Contribution Details
Type | Master's Thesis |
Scope | Discipline-based scholarship |
Title | Customer Base Valuation in Contractual Business Settings |
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Institution | University of Zurich |
Faculty | Faculty of Economics, Business Administration and Information Technology |
Number of Pages | 52 |
Date | 2016 |
Abstract Text | Customer Lifetime Value (CLV) is an important metric used in marketing to assess the value of the relationship with every customer. This thesis proposes and compares eleven different customer retention models to calculate the CLV in a multi-service, contractual setting. Eight of these models are constructed at a customer-relationship-level i.e. focusing on weather a customer maintains the relationship with the company or not. The three remaining models are constructed at a service-level, focusing on the purchase likelihood of individual services within the company and paying especial attention to cross buying. The performance of the models is tested on two datasets that contain information about the customers of two direct insurance companies, for which the future customers expenditures are calculated for a period of four years. Simple relationship-level models and frailty relationship-level models show the overall best performance. The service-level Markov model achieves the highest performance when it comes to the categorization of customers according to their value. |
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