A Model to Determine Customer Lifetime Value in a Retail Banking Context

摘要: During the past decade, retail banking industry started to face a set of radically new challenges that had an overall negative impact on margin and profitability. In response these challenges, more banks have focused increasing scale their operations, which has led rising importance mergers acquisitions (M&A). From Marketing perspective, M&A transactions are nothing other than acquisition customer base one company by another one, usually based assumption acquiring bank can manage this profitably selling was able to. It is therefore not surprising questions about valuation customers become important ever in industry. Our article provides contribution area presenting model we developed cooperation with leading German bank, takes account specific requirements combination first-order Markov chain modeling CART (classification regression tree) deal equally well discrete one-time as continuous revenue streams. Furthermore, it analysis homogeneous groups instead individual easy understand parsimonious nature. our provide proof practical value approach validating using 6.2 million datasets. This validation shows how be applied day-to-day business life.