Abstract
To understand the value of customers and target the most profitable customers, this paper uses cluster analysis to classify customers into four groups as platinum, gold, iron, and lead. Then, to predict group membership of new customers, data envelopment analysis-discriminant analysis (DEA-DA) model is applied. This paper operationalises the concept proposed by Zeithaml et al. (2001), ('The customer pyramid: creating and serving profitable customers', California Management Review, Vol. 43, No. 4, pp.118-142) on forming the customer pyramid. A case study demonstrates the application of the proposed approach.
Original language | English |
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Pages (from-to) | 348-360 |
Number of pages | 13 |
Journal | International Journal of Business Excellence |
Volume | 6 |
Issue number | 3 |
DOIs | |
Publication status | Published - Jan 1 2013 |
Keywords
- Cluster analysis
- Customer pyramid
- DA
- Data envelopment analysis
- Data envelopment analysis-discriminant analysis
- DEA
- DEA-DA
- Discriminant analysis
ASJC Scopus subject areas
- Business and International Management
- Strategy and Management