A net present value model with application to target marketing

Jingjing Qu and Yumin Chen

Applied Marketing Analytics: The Peer-Reviewed Journal, 2014, vol. 1, issue 1, 53-57

Abstract: The net present value (NPV) model extends the traditional response model by explicitly modelling the churn or attrition probability of customers. It has become powerful marketing tool that helps with targeting loyal customers rather than transient customers. It can be used in various industries such as insurance, telecommunications and magazine subscriptions, where persistency plays a big role in marketing effi ciency and revenue. The comparison results of the traditional paid response model and the NPV model illustrate the advantage of the NPV model in acquiring longer persistency customers and generating higher net profi t.

Keywords: net present value; persistency; survival analysis; churn probability; Cox’s proportional hazard regression; target marketing (search for similar items in EconPapers)
JEL-codes: M3 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hstalks.com/article/3602/download/ (application/pdf)
https://hstalks.com/article/3602/ (text/html)
Requires a paid subscription for full access.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aza:ama000:y:2014:v:1:i:1:p:53-57

Access Statistics for this article

More articles in Applied Marketing Analytics: The Peer-Reviewed Journal from Henry Stewart Publications
Bibliographic data for series maintained by Henry Stewart Talks ().