خلاصة:
Customer activity has received more attention due to the increase of social network applications. Moreover, customer activity could be an answer to the research debate about the significant relationship between retention rate and lifetime profitability of customers. Several researchers believe that an increase in the retention rate of customers may enhance their customer lifetime value (CLV), or their lifetime profitability. Other researchers believe that this relationship does not exist or is not significant, and retention rate alone cannot adequately explain lifetime value. This study aims to tackle this challenge and empirically examines the relationship between retention rate and CLV. Moreover, it investigates whether the activity level of customers increases the relationship between retention rate and CLV. This research has been empirically verified in the banking industry; and various techniques including analytic hierarchy process (AHP), mathematical models, and statistical techniques have been used. The empirical results reveal an exponential correlation between the combination of activity level and retention rate with CLV.
ملخص الجهاز:
Moreover, it investigates whether the activity level of customers increases the relationship between retention rate and CLV.
Hope and Wagner (2014) studied how to relate the activity of customers to marketing models for customer base analysis (Hoppe & UdoWagner, 2014).
This research aims to study the impact of activity level in conjunction with the retention rate on CLV using as subjects, the customers of retail banking in Iran.
Research model and hypotheses Customer retention is of significant importance in current business strategies, since it is an opportunity to increase the value of customers and reduce costs (Harrison & Ansell, 2002; Seo, Ranganathan & Babad, 2008).
H2: There is a high positive relationship between retention rate and lifetime value of customers who have purchased both contractual and non-contractual based products.
Indeed, this study investigates if a high retention rate and low activity level have a high relationship to the lifetime value of customers.
Thus, the hypotheses are: H3: There is a high positive relationship between a combination of retention rate and activity level with the lifetime value of customers who have purchased non-contractual based products.
H4: There is a high positive relationship between a combination of retention rate and activity level to the lifetime value of customers who have purchased both contractual and non- contractual based products.
The results reveal that activity level is an effective variable in relationship between customer retention and their profitability.