Segmentation of the customers based on customer value: A three-way decision perspective

Abstract

This paper establishes an innovative value evaluation framework based on the criterion-oriented three-way decision (3WD) in the double hierarchy linguistic term (DHLT) environment to help the customer manager finish customer segmentation. Customer relationship management is the key to the success of enterprises in the information economy era. The segmentation of customers based on their relative criteria can identify the customers who are high-value customers for enterprises. However, multi-criteria decision-making can only display the value ranking of customers, rather than the value segmentation of customers. The employment of 3WD solves this problem. Then we classify the customers based on the 3WD method. First, the criteria are evaluated by using DHLTs, while the weights of criteria are acquired according to the maximum deviation method. Second, the conditional probabilities are estimated by the improved TOPSIS method combined with gray relation analysis, while the threshold values are calculated by the relative utilities which are constructed on the basis of the criterion information. Subsequently, the segmentation of customers is obtained according to the maximum-utility principle. Lastly, case research about the segmentation of customers based on value is used to demonstrate the practicality of our method, while some strategies about customer relationship management are given based on customer segmentation for obtaining maximum returns with minimum investment.