For effective Customer Relationship Management (CRM), it is essential to have information on the potential value of customers. Based on the interplay between potential value and realized value, managers can devise customer specific strategies. In this article, we introduce a model for predicting the potential value of a current customer. Furthermore, we discuss and apply different modeling strategies for predicting this potential value.

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ERIM Top-Core Articles
Decision Support Systems
Erasmus Research Institute of Management

Verhoef, P.C, & Donkers, A.C.D. (2001). Predicting Customer Potential Value: An Application to the Insurance Industry. Decision Support Systems, 32(2), 189–199. doi:10.1016/S0167-9236(01)00110-5