An Application Study On Customer Lifetime Value Model Based On Personalized Information Of The Customer

In the last decades, customer lifetime value (CLV) has got more and more attention. The scholars in different areas have done much research on the CLV which mainly include two categories:the CLV models and the practice value of CLV.Firstly, The paper summarized the research of customer lifetime value; Secondly, studied the CLV model based on the Pareto/NBD model and Gamma-Gamma model, found that the existing deficiencies and shortcomings in the application of the model to predict customer lifetime value, and found the fundamental reason for its ineffective; thirdly, added the customer’s personalized information which is the three indicators R, F, M value of RFM model in this paper into the CLV model, in order to improve the performance of the CLV model; Finally, used the real sales data of Dalian friendship Mall for the sample, empirically tested the superiority of the improved CLV model to the original CLV model, and explored the instructive significance of the model for the practice of business and management.The value of this research is mainly reflected in the following three aspects:In theory, the integration of the customer’s personalized information and the CLV model, not only extended the study of the CLV model based on Pareto/NBD model and Gamma-Gamma model, but also provided a new but effective method which can enhance the theoretical value of the CLV model.Methodologically, the most important steps are that regarded the R, F, M value of a customer in the RFM model as the customer’s personalized information, then added this adjustment factors into an improved model. Obviously, the improved method is simple and easy to operate, which is also used to improve other similar CLV models.In the management practices, used the CLV value which is calculated by the improved CLV model as the basis of customer segmentation, identified the superior customers and inferior customer in the customer base, and proposed some differentiated marketing strategies according to the characteristics of the different types of customers, provided valuable suggestions for the enterprise to implement the differentiated marketing measures and improve the quality of customer relationship management.