Measurement of Customer Equity from the Perspective of Data Mining

Abstract

As the uncertainty of individual customer’s consumption behavior makes it difficult to measure customer equity, the present paper advances a dynamic method for the measurement of Customer Equity on the basis of a data-mining technique and the classification of customers. It starts by introducing the process and method for calculation, and subsequently it demonstrates the application of the method by empirical analysis. The method enables the measurement of Customer Equity in a more accurate and practical way, and hence it may offer significant support for enterprises to achieve more effective marketing.