Pedro Sobreiro, Domingos Martinho, António Pratas, Jose Garcia-Alonso and Javier Berrocal

DOI: https://doi.org/10.6000/1929-7092.2019.08.155

Published: 31 December 2019

Abstract: Wine companies operate in a very competitive environment in which they must provide better-customised services and products to survive and gain advantage. The high customer turnover rate is a problem for these companies. This work aims to provide wine companies with new knowledge about customers that help to retain the existing ones. The study applies a collected dataset from a transaction database in a medium-sized Portuguese wine company to determinate: (1) customer lifetime value; (2) cluster customer value as output (customer loyalty). The measurement of the customer lifetime value (CLV) was analysed using the Pareto/NBD model and gamma-gamma model. Clustering techniques are employed to segment customers according to Recency, Frequency, and Monetary (RFM) values. Study findings show that exists three clusters with different interest to the marketing strategies, identifying the high-value customers, to target using marketing to increase their lifetime value effectively. The implications for the marketing strategy decisions is that using techniques based on the RFM model can make the most from data of customers and transactions databases and thus create sustainable advantages.

Keywords: Customer lifetime value, clustering, wine marketing, RFM model.

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