PREDICTING THE SIZE OF THE COMPANY-CUSTOMER BASE BASED ON THE MARKOV CHAINS

Andreeva, Anna; Bogdanova, Tatyana

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PREDICTING THE SIZE OF THE COMPANY-CUSTOMER BASE BASED ON THE MARKOV CHAINS

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PREDICTING THE SIZE OF THE COMPANY-CUSTOMER BASE BASED ON THE MARKOV CHAINS

Annotation

PII

S042473880000616-6-1

Publication type

Article

Status

Published

Authors

Anna Andreeva Send message Tatyana Bogdanova

Edition

Volume 52 Issue 1

Pages

79-94

Abstract

The article represents the information and logical complex model to manage the company’s customer base in order to calculate the index of long-term value of the client. In contrast to the previous issues this model takes into account the peculiarities of consumer behavior and sociodemographic characteristics of the client groups, and the movement of customers within the customer base is represented as a Markov chain. Developed complex dynamic model to manage the company’s customer base makes possible to forecast the cluster frequency and the client base at all on any period, to analyze the population-change-dynamics of client cluster and to highlight the most important stages in the formation and development of the customer base. On each stage highlighted groups of clients are estimated according to future company’s profit and potential for cross selling of products/services. The estimates allow to calculate the budget for marketing activities on retention of given profit level and to compose the most effective plan of address-directed marketing activities.

Keywords

management of customer base of the company, retail trade, group of clients, customer loyalty, buying behavior, Markov chain, dynamic model, long-term value of the customer base

Date of publication

01.01.2016

Number of purchasers

Views

812

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GOST	Andreeva A., Bogdanova T. PREDICTING THE SIZE OF THE COMPANY-CUSTOMER BASE BASED ON THE MARKOV CHAINS // Economics and the Mathematical Methods. – 2016. – V. 52. – Issue 1 C. 79-94 .
MLA	Andreeva, Anna, Bogdanova, Tatyana "PREDICTING THE SIZE OF THE COMPANY-CUSTOMER BASE BASED ON THE MARKOV CHAINS." Economics and the Mathematical Methods. 52.1 (2016).:79-94.
APA	Andreeva A., Bogdanova T. (2016). PREDICTING THE SIZE OF THE COMPANY-CUSTOMER BASE BASED ON THE MARKOV CHAINS. Economics and the Mathematical Methods. vol. 52, no. 1, pp.79-94


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