Customer Valuation Through Data Mining

In this study, a comprehensive assessment of a variety of customer contribution components is done, whereby the appropriate approach or its close alternatives are applied to the large number of parameters that drive customer value. Apart from the measurable actual contributions, represented by each customer’s current portfolio of products and services, and the company’s costs to provide and deliver them, the potential contribution is discussed, from a marketing standpoint, and considered through a data mining approach. As a Managerial Information System, the proposed individual customer valuation methodology is driven to support concrete decisions, thereby differentiating it from a simple P&L (Profits and Losses) split, among customers. The proposed methodology is implemented in a real customer base sample, allowing the measurement of benefits it would effectively capture.