Customer's Time-Variant Purchase Behavior and Corresponding Marketing Strategies: An Online Retailer's Case

Abstract

The traditional customer relationship management (CRM) studies are mainly focused on CRM in a specific point of time. The static CRM and derived knowledge of customer behavior could help marketers to redirect marketing resources for profit gain at the given point in time. However, as time goes on, the static knowledge becomes obsolete. Therefore, application of CRM to an online retailer should be done dynamically in time. Though the concept of buying-behavior-based CRM was advanced several decades ago, virtually little application of the dynamic CRM has been reported to date. In this paper, we propose a dynamic CRM model utilizing data mining and a monitoring agent system to extract longitudinal knowledge from the customer data and to analyze customer behavior patterns over time for the retailer. Furthermore, we show that longitudinal CRM could be usefully applied to solve several managerial problems, which any retailer may face. (C) 2002 Elsevier Science Ltd. All rights reserved.