Name Matric Number Lecturers Name Group Due date

: Azizah Binti Aziz : 211299 : Dr. Izwan Nizal Bin Mohd Shaharanee :A : 6 March 2014

A Study on the Applications of Data Mining Techniques to Enhance Customer Lifetime Value This study applies Data Mining techniques from customer and transaction databases of a department store to improve Customer Lifetime Value (CLV) based on the RFM (Recency Frequency Monetary) model in order to improve their lifetime value effectively. It also helps companies maintain competitive advantage as well. The main objective was to assess CLV and to improve CLV by target marketing and cross-selling. Based on RFM model, Goodman suggested that method should be avoid by focusing on less profitable customers and allowing resources to be diverted to more profitable customers. Thus, CLV is typically used to identify profitable customers and to develop strategies to target customers. The reasons we select data mining is to study adopts RFM module of customer's consuming behavior analysis as the way a business evaluates customer's value and loyalty to distinguish customers effectively. These are knowledge (support marketing decisions and customer relationship management) and competition (sustainable enhance business competition advantage). The result shows that target marketing is useful in the increase of the customers CLV from the I company which had been reached their goal having a large number of customer loyalty and value in March 2007. This is because of a good quality placed emphasis on stabilizing the good customers. The authors implemented two influences objectives to see how the model reacted by assess and utilize target marketing to improve CLV. The influences of assess will occur based on the different factors. The phenomena are assumes to increase the quality of service, customer life cycle, the number of attracting customers and customer satisfaction. However, when the quality of service reduces, it means the company will fall. As a result, by using data mining model can definitely improve the companys competitiveness in order to enhance CLV.

References Chia, C. S. & Huan, M. C. (2009, February). A Study on the Applications of Data Mining Techniques to Enhance Customer Lifetime Value. Retrieved March 2, 2014, from http://www.wseas.us/e-library/transactions/information/2009/31-739.pdf