Analysis Of Customer Lifetime Value And Its Application In B2C Context

With the rapid development of the Internet, B2C is prone to be a more personalized service. In order to meet the needs of customers'individualization, these B2C providers need to balance the customer promoting expenditure and the revenues from promoting activities. Then some problems that who are profitable customers, how to evaluate the profits they have brought in their lifetime and how to segment customer by their profits, and how to make promoting policies according to the segmentation, essentially affected theses B2C providers'success. In order to solve these problems, this article employs the Customer Lifetime Value Model into the B2C context and proposes a Customer Lifetime Prediction Model, and then applies it into customer segmentation. After that, the author put forwards some marketing strategies in an instance, according to different segmentation.Customer Lifetime Value can be seen from both the customers'perspective and companies'perspective, while this article analyzes the Customer Lifetime Value models and its applications from the company's perspective. On the basis of the flexibility and predictive features of Markov Chain Model and the analysis of customers'historical behavior features in RFM (Recency, Frequency, Monetary), the author combines these two models together. By refining the conventional RFM model, the prediction of the customer's value becomes more precise. And then, this article uses the K-means arithmetic to do the customer segmentation, and proposes different marketing strategies according to different customer groups. Such method helps to make effective marketing polices.At the end of the article, the author concludes the existing research methods, and brings forward his own ideas on how to perfect the Customer Lifetime Evaluation Model and Customer Segmentation in B2C market.