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Modeling CLV for financial service providers: case of Karafarin Bank
2009 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Today companies are urged to acquire and retain long-term relationships with customers rather than having discrete transactions with them, and this fact has led managers to wonder how they could measure the long-term value of a customer in a way that would represent both the relationship benefits and accounting profits of a customer. These conceptual developments along with growing competitiveness of Iranian financial services industry, have urged top management of this industry to seek more accurate ways on how to better manage their relationships with customers and prevent losses by distinguishing high value and low value customers. Although there are many value measurement tools developed by researchers in different industry settings, there is no such model specified to financial services which brings into account the risk of relationship. This research has focused on developing a value measurement model by which a bank’s management could better decide whether a business credit facility applicant is worth the resources s/he receives. This model is developed based on “customer lifetime value” concept and is risk-adjusted to overcome this common flaw of such models. The risk is modeled by both Delphi method (qualitative risk) and logistic regression method (quantitative risk) to partially resolve the unreliability issues concerned with financial statements in Iran. The model is then tested through a case study- Karafarin Bank (KB)- and new applications such as loan pricing and collateral setting based on this model are suggested to be worked out by KB’s management.

Place, publisher, year, edition, pages
Keyword [en]
Social Behaviour Law, Customer lifetime value, Delphi method, qualitative risk, case study, mathematical modeling
Keyword [sv]
Samhälls-, beteendevetenskap, juridik
URN: urn:nbn:se:ltu:diva-58500ISRN: LTU-PB-EX--09/069--SELocal ID: f15669fb-558b-4c00-9a4a-d3b8dfc04901OAI: diva2:1031888
Subject / course
Student thesis, at least 30 credits
Educational program
Electronic Commerce, master's level
Validerat; 20101217 (root)Available from: 2016-10-04 Created: 2016-10-04Bibliographically approved

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