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Developing retention strategies based on customer profitability in telecommunications: An empirical study

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Research evidence shows that telecommunications companies fail to make their CRM efforts pay off. This is probably due to a lack of capability to develop effective customer strategies based on customer profitability. Reducing the churn rate in the industry is not enough. Companies must be able to plan and execute profitable campaigns, taking into account both customer risk and customer profitability. Controlling and evaluating the campaign's results is a crucial factor. In this paper, this deficiency is addressed by proposing a framework for building effective customer strategies based on customer behaviour, customer profitability and customer risk. Empirical results are analysed and discussed.Journal of Database Marketing & Customer Strategy Management (2005) 12, 226–242; doi:10.1057/palgrave.dbm.3240259
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Document Type: Research Article

Affiliations: 1is Managing Director of Swiss Valuenet. He graduated in economics and computer science and has a doctorate in customer relationship marketing from the University of Zurich. Dr Xevelonakis has headed several segmentation projects involving customer profitability and customer needs in the telecommunications and banking sectors. Before joining Swiss Valuenet he headed the Strategic Customer Relationship Management (CRM) Department of Swisscoms where he was responsible for customer segmentation, customer profitability and for the whole business intelligence process. He has also worked for Credit Suisse, where he was responsible for setting up the database marketing process for direct banking. His research interests involve predictive modelling for churn management, customer segmentation, customer profitability and designing concepts for strategic CRM. He also lecturers in CRM and data process modelling at the Zurich University of Applied Science.

Publication date: 2005-04-01

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