RT Generic
T1 Valuing customer portfolios with endogenous mass-and-direct-marketing interventions using a stochastic dynamic programming decomposition
A1 Esteban-Bravo, Mercedes
A1 Vidal-Sanz, Jose M.
A1 Yildirim, Gökhan
A2 Universidad Carlos III de Madrid. Departamento de Economía de la Empresa, 
AB Customer Relationship Management generally uses the value of customers to allocate marketingbudget. But marketing interventions generally change the customer behavior, turning upside-downthe customers ranking based on their initial valuations and making the budget allocationsuboptimal. Rational Managers should allocate the marketing budget to maximize the expected netpresent value of future profits drawn from each customer, simultaneously planning massmarketing interventions and direct marketing effort on each individual. This is a large dimensionalStochastic Dynamic Program, which cannot be easily solved due to the curse of dimensionality.This paper propose a new decomposition algorithm to alleviate the curse of dimensionality in SDPproblems, which allows forward-looking firms to allocate the marketing budget optimizing theCLV of their customer base, simultaneously using customized and mass marketing interventions
YR 2012
FD 2012-06
LK https://hdl.handle.net/10016/14547
UL https://hdl.handle.net/10016/14547
LA eng
NO Research funded by two research projects, S-0505/TIC-0230 by the Comunidad de Madrid andECO20011-30198 by MICINN agency of Spanish Government
DS e-Archivo
RD 17 jul. 2024