To predict the profitability of a customer, today’s firms have to practice Customer Lifetime Value (CLV) computation. Different approaches are proposed in the last ten years to analyze the complex customer phenomenon. One of them is Markov Decision Process (MDP) model. The class of Markov Models is an effective and a flexibility decision model. Whereas the use of MDP model is limited by its ass...

Since the increased importance is placed on customer equity in today’s business environment, many firms are focusing on the notion of customer loyalty and profitability to increasing market share. Building successful customer relationship management (CRM), a firm starts from identifying customers’ true value and loyalty since customer value can provide basic information to deploy more targeted ...

T need to understand the relationships among customer metrics and profitability has never been more critical. These relationships are pivotal to tracking and justifying firms’ marketing expenditures, which have come under increasing pressure. The objective of this paper is to integrate existing knowledge and research about the impact of customer metrics on firms’ financial performance. We inves...

Departamento de Fisiologia, Universidade Federal de Sergipe, Campus Universitário “Prof. Aloísio de Campos”, 49100-000 São Cristóvão-SE, Brazil, Laboratório de Pesquisa do Vale do São Francisco, Universidade Federal do Vale do São Francisco, Caixa Postal 252, 56306-410 Petrolina-PE, Brazil, Laboratório de Tecnologia Farmacêutica, Universidade Federal da Paraíba, Caixa Postal 5009, 58051-970 Joã...

Valuing customers is a central issue for any commercial activity. The customer lifetime value (CLV) is the discounted value of the future profits that this customer yields to the company. In order to compute the CLV, one needs to predict the future number of transactions a customer will make and the profit of these transactions. With the Pareto/NBD model, the future number of transactions of a ...

The benefi t of managing customer relationship by inputs (acquisition and retention costs) and outputs (revenues) for each customer is that marketing managers can better prioritise their efforts by examining the return on marketing investment and thus better differentiate customers by their relative benefi ts and costs. Valuing customers and measuring marketing effect using only direct fi nanci...

This paper provides insights into assessing customer relationships in a revenue management environment and depicts methodological problems that may arise in this context. For this purpose, we formulate a multi-period deterministic linear programing model, which accounts for customers’ future demand behavior being dependent on the provider’s previous availability decisions. Moreover, on the basi...

We observed a new approach being adopted in the software industry that combines a business model with strong technical support. This Product Flow Model combines aspects of the Product Line model with workflow concepts for virtual enterprises. The Product Flow Model (PFM) addresses the costly ongoing maintenance of major products being delivered to customers. When such maintenance is provided by...