Combining Clustering and MCDM Approach for Evaluating Customer Lifetime Value Ratings

Authors

Ya-Yueh Shih, Institute of Information Management, National Chiao Tung University, Hsinchu, Taiwan and Department of Information Management, Minghsin University of Science & Technology, Hsinchu, TaiwanFollow
Duen-Ren Liu, Institute of Information Management, National Chiao Tung University, Hsinchu, TaiwanFollow
Gwo-Hshiung Tzeng, Institute of Management of Techology, National Chiao Tung University, Hsinchu, Taiwan

Document Type

Article

Abstract

Creating successful transaction actions to retain customers for future re-purchasing is extremely important in fiercely competitive environments. Moreover, different market strategies should be practiced for customers with different lifetime values and loyalty ratings. This work proposes a method, which combines clustering analysis and multiple criteria decision-making approach to evaluate customer lifetime value ratings, and construct the classification rules for individual clusters in market segmentation. An empirical case involving a hardware retailer is illustrated to show the usefulness for evaluating customer lifetime value ratings.

Recommended Citation

Shih, Ya-Yueh; Liu, Duen-Ren; and Tzeng, Gwo-Hshiung, "Combining Clustering and MCDM Approach for Evaluating Customer Lifetime Value Ratings" (2002). ICEB 2002 Proceedings (Taipei, Taiwan). 107.
https://aisel.aisnet.org/iceb2002/107