THE WHATIS.COM WORD-OF-THE-DAY December 12, 2001 customer valuation ______________ TODAY'S SPONSOR: VeriSign - The Value of Trust
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Customer valuation requires that the company evaluate past data to learn which customers purchased recently, which customers purchased frequently, and which customers spent the most money, in hopes that the company can forecast future purchase potential and make sure time and resources are spent only on its best customers. To understand how customer valuation works, let's imagine there is a company that manufactures skateboards called CoolSkate. CoolSkate's sales are made primarily through Internet and print catalog sales. Through surveys and questionnaires on their Web site, CoolSkate has accumulated quite a bit of data about the buying habits, preferences, and age range of their customers. With this data, CoolSkate will devise a customer valuation scoring system that awards points based on total purchasing dollars, repeat purchases, and customer loyalty. CoolSkate can then use the information gained from the customer valuation scores to predict repeat-purchase probability as well as the probability of attrition, and target their promotions to customers who are likely to make new purchases. Customer valuation is based upon the 80/20 rule in marketing, whereby a company spends the majority of its time working with its best customers. There are many software applications on the market to help companies determine a point system relevant to their products or services and combine aggregated data to determine customer valuation. RELATED TERMS: customer relationship management http://searchcrm.techtarget.com/sDefinition/0,,sid11_gci213567,00.html _________________ SELECTED LINKS The Austin Business Journal describes the part customer valuation plays in customer recovery. http://austin.bcentral.com/austin/stories/1999/02/22/smallb3.html SearchCRM.com provides links to more resources about data mining and customer valuation. http://searchcrm.techtarget.com/bestWebLinks/0,289521,sid11_tax286894,00.html New Energy is one of many companies that offer software applications to help a company analyze customer valuation. http://www.newenergyassoc.com/pdf/CustomerValuationAnalysis.PDF ____________________________________ KNOW IT ALL QUESTION | #80 In a personal computer, this is a software driver or program that uses the Advanced SCSI Programming Interface protocol to interface with the Small Computer System Interface (SCSI) bus. a. ASPI driver b. Access Method c. Virtual Device Driver d. Driver Development Kit e. 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