Optimal allocation of short-term marketing resources with a life cycle customer value approach

 Developing an optimization model based on CLV to customer targeting for the retention program

  This research consists of three steps. In the first step, using data mining methods, the churn probability of each customer is determined. In the second step, the customer lifetime value for each customer is calculated and finally, in the last step, the model is solved using the LP-metric model in GAMS software. we used the proposed model for one of the insurance organizations of the country. 

  A bi-objective optimization model based on CLV is proposed for selecting target customers for the retention program and selecting relevant costs for each customer. One of the objective functions is set to maximize CLV from performing retention programs and the other one is set to minimize program costs.

  By solving the proposed optimization model, a Pareto diagram is obtained that taking into account the opinion of experts, each point on this diagram can be an optimal answer for selecting the target customers of retention programs and how to spend for them.