Airline customer lifetime value estimation using data analytics supported by social network information

Çavdar, Ahmet Birol and Ferhatosmanoğlu, Nilgün

Journal of Air Transport Management, 2018, vol. 67, issue C, 19-33

Abstract: Companies can improve their customer relationships and business performance via analytical applications such as estimation of customer lifetime value (CLV) and profitability, customer profiling and classification, customer retention and churn analyses. Customer Relationship Management (CRM) tools can now have access to relationship and interaction data of the customers, besides the traditional data sets such as billing information. While there has been a sharp increase in mining social and interaction data, integration of this information with the current data analytical models is limited. In this paper, we develop a new model for estimating the customer lifetime value in airline industry that integrates customers' social network and flight information. We first adopt a regression model for airline customers that can be used to estimate their CLVs. We then present a methodology to enhance this base model with customers' social network information to incorporate indirect contributions the customers make. We compare the performances of both models to show that our proposed method may improve the accuracy and reliability of models that make use of only flight related factors. We provide examples to potential customer analyses using our models for use by airline CRM applications.

Keywords: Social network analysis; Regression and classification models; Time series; Forecasting methods; Customer profiling; Data analytics; Customer relationship management (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0969699716303921
Full text for ScienceDirect subscribers only

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:eee:jaitra:v:67:y:2018:i:c:p:19-33

DOI: 10.1016/j.jairtraman.2017.10.007

Access Statistics for this article

Journal of Air Transport Management is currently edited by Anne Graham

More articles in Journal of Air Transport Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().