Data Mining in Customer Acquisition

1217 WordsNov 3, 20085 Pages
Managing the customer lifecycle is the last activities in primary stage of CRM value chain. This activities involves customer acquisition, customer retention and customer development. However, why the companies needs to focus to customer acquisition when the cost involved in customer acquisition is high rather than customer retention? We know that even the most customer-centric company like can't assure its customer to be royalty to them forever. The existing customer may switch to competitors, they don't need that products/services anymore, or even die. So, there is time where the customer are losing its value and need to be replaced by acquiring new customer. Acquiring new customer does not always means get a totally new…show more content…
So, 5.5% * 100,000 is equal to 5,500 responded customer. Thus, 5,500 * RM69.95 = RM384,725 is generated from the promotion. In short term, the company may loss RM612,272 but each of these customer, due to the anticipated CLV, will generate RM440,000 in profit and gain RM2.4 million in revenue. Determine the Likelihood that a customer will purchase a specific ordering Data mining can also be used to determine the likelihood of a customer that will purchase a specific ordering. Given the current customer base for product x, who will most likely to become purchasers of product x? This question can be answered by using data mining in conjunction with customer database that include internal data about a customer's relationship and interactions, and derived data that identify the customer's value to the company and similarities or differences from other customers are applied. Each customer is designated a score that rank orders customer propensity to purchase relative to another. using this purchase propensity data within the customer acquisition process creates a more effective sales result. Offer the Right Product to the Right Customer Via the Right Channel After knowing the target customer that will generate the highest lifetime value to company, determine the best way to access those customer is the next step. Combining the derived information about agent's or broker's strengths and value to the company guides the effort of all-important linkage to the most

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