Modeling and Application of Customer Lifetime Value in Online Retail
Journal Title: Informatics - Year 2018, Vol 5, Issue 1
Abstract
This article provides an empirical statistical analysis and discussion of the predictive abilities of selected customer lifetime value (CLV) models that could be used in online shopping within e-commerce business settings. The comparison of CLV predictive abilities, using selected evaluation metrics, is made on selected CLV models: Extended Pareto/NBD model (EP/NBD), Markov chain model and Status Quo model. The article uses six online store datasets with annual revenues in the order of tens of millions of euros for the comparison. The EP/NBD model has outperformed other selected models in a majority of evaluation metrics and can be considered good and stable for non-contractual relations in online shopping. The implications for the deployment of selected CLV models in practice, as well as suggestions for future research, are also discussed.
Authors and Affiliations
Pavel Jasek, Lenka Vrana, Lucie Sperkova, Zdenek Smutny and Marek Kobulsky
Acknowledgement to Reviewers of Informatics in 2016
The editors of Informatics would like to express their sincere gratitude to the following reviewers for assessing manuscripts in 2016. We greatly appreciate the contribution of expert reviewers, which is crucial to the...
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