Journal of Marketing Science ›› 2011, Vol. 7 ›› Issue (3): 102-110.

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Prediction and analysis of customer loss based Beta-geometric/NBD model

Wang Xiening   

  1. Wang Xiening, institute of Management Science and Engineering, DongBei University of Finance and Economics
  • Online:2011-09-01 Published:2013-11-01


It is of great practical and applicable value for corporation marketing to forecast and research the behavior of customer transactions. Beta-geometric/ NBD model can forecast customer’s potential purchasing according to his/her past buying behavior. However, there are some limitations in using this model due to its restricted assumptions. This paper focuses on the model’s practical application in the field of marketing, empirical analysis and model parameters optimization, as well as utilization of intermediate results to build an early loss warning methods. The empirical results show that the model have a high application value in forecasting customer’s buying behavior in China BtoC marketing related fields. This model is more suitable for the customer who has high frequency purchasing history. Relatively, the prediction outcome has certain bias for those who have low transactions frequency and stay not a long time from the first purchase. Finally, the paper discussed the applicable field and scope of the model under its assumptions and indicated the deficiencies of the model.

Key words: beta-geometric/NBD model, customer value, B2C website, loss warning