The Evaluation And Application Research Of Customer Cross-selling Value Based On Customer Segmentation

Competition between the enterprises has been becoming more and more severe because of the economic globalization and the development of information technology. Now, customer acquirement and retention is more important for the enterprise to keep competitive competence than in the past. Customer Relationship Management (CRM) was introduced right under such background. Customer Value is the key concept within CRM. However, the evaluation of Customer Value—especially Customer Potential Value (CPV)—is the most difficult. It has attracted great attention from lots of researchers. But extant researches about Customer Value, under the concept of Customer Lifetime Value, were mainly conducted based on individual customer or on the whole customers and seldom took Cross-selling Value into consideration .So there are still some problems need to be solved.Considering the above reasons, this paper suggests a new idea of the evaluation of Customer Up-selling Value (CPVu). Firstly, customer segmentation is conducted based on the customers'RFM (Recency, Frequency, Monetary). Then some homogeneous customer segments are generated and their customer retention rates are computed. Secondly, in order to get the knowledge of customer's Cross-selling Value, some data mining technologies are used in the paper. The extracted association rules above certain confidence level are used to find out the possible cross-selling opportunities and to evaluate the customers'Cross-selling Value. At last, the paper discusses the application of the CPVu evaluation results in marketing management. According to the different structure of customer current value, Customer Up-selling Value and Customer Cross-selling Value of certain customer segment, relevant marketing strategies are put forward.