A comparative study of hybrid machine learning techniques for customer lifetime value prediction

Purpose – Customer lifetime value (CLV) has received increasing attention in database marketing. Enterprises can retain valuable customers by the correct prediction of valuable customers. In the literature, many data mining and machine learning techniques have been applied to develop CLV models. Specifically, hybrid techniques have shown their superiorities over single techniques. However, it is unknown which hybrid model can perform the best in customer value prediction. Therefore, the purpose of this paper is to compares two types of commonly‐used hybrid models by classification+classification and clustering+classification hybrid approaches, respectively, in terms of customer value prediction.Design/methodology/approach – To construct a hybrid model, multiple techniques are usually combined in a two‐stage manner, in which the first stage is based on either clustering or classification techniques, which can be used to pre‐process the data. Then, the output of the first stage (i.e. the processed data) is ...