Proceedings of the 2nd International Conference on Mathematics and Mathematics Education 2018 (ICM2E 2018)

Model of Customer Lifetime Value with Two Customer and a Former Customer State

Authors
Dony Permana, Syafriandi, Nonong Amalita
Corresponding Author
Dony Permana
Available Online December 2018.
DOI
10.2991/icm2e-18.2018.3How to use a DOI?
Keywords
Customer Lifetime Value, Markov Chain, Customer, Former Customer, Transition Probability
Abstract

A model of Customer Lifetime Value can be designed by a stochastic process of Markov Chain. In the model, there are several states that must be passed by a customer. Every two states have a transition probability as a representation of state moving probability by a customer. Transition from a state to another state is assumed to fill Markov chain. In previous research, the model only has one customer state and some former customer states. Here, the model is built by two customer states and a former customer state. In real conditions, many companies are found to have more than one product variant for one type of goods/services. Typically variant differences are based on differences in taste, quality, volume/mass or services. Each variant usually has its own customer. But do not rule out that a customer can buy the product by alternating variants. The problem is how to calculate the customer lifetime value for each product variant. The expected result is an increase the total customer lifetime value compared with the previous model.

Copyright
© 2018, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 2nd International Conference on Mathematics and Mathematics Education 2018 (ICM2E 2018)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
December 2018
ISBN
10.2991/icm2e-18.2018.3
ISSN
2352-5398
DOI
10.2991/icm2e-18.2018.3How to use a DOI?
Copyright
© 2018, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Dony Permana
AU  - Syafriandi
AU  - Nonong Amalita
PY  - 2018/12
DA  - 2018/12
TI  - Model of Customer Lifetime Value with Two Customer and a Former Customer State
BT  - Proceedings of the 2nd International Conference on Mathematics and Mathematics Education 2018 (ICM2E 2018)
PB  - Atlantis Press
SP  - 10
EP  - 13
SN  - 2352-5398
UR  - https://doi.org/10.2991/icm2e-18.2018.3
DO  - 10.2991/icm2e-18.2018.3
ID  - Permana2018/12
ER  -