8.2 Data description
We will use two simulated data sets from SMCRM package. This package consists of 7 data sets used in the book titled “Statistical Methods in Customer Relationship Management” by Kumar and Petersen. Specifically we will use customerRetentionTransactions and customerRetentionDemographics data sets. The first data consists of customer transactions information on 500 customers over 12 quarters. There are no missing values so every customer has 12 observations and accordingly there are 6,000 observations (500*12). The second data set contains demographic information on 500 customers. This information is time-invariant.
The data sets and their descriptions are as follows:
8.2.1 customerRetentionTransactions
| Variable | Description |
|---|---|
| customer | customer number (from 1 to 500) |
| quarter | quarter (from 1 to 12) where the transactions occurred |
| purchase | 1 when the customer purchased in the given quarter and 0 if no purchase occurred in that quarter |
| order_quantity | dollar value of the purchases in the given quarter |
| crossbuy | number of different categories purchased in a given quarter |
| ret_expense | dollars spent on marketing efforts to try and retain that customer in the given quarter |
| ret_expense_sq | square of dollars spent on marketing efforts to try and retain that customer in the given quarter |
8.2.2 customerRetentionDemographics
| Variable | Description |
|---|---|
| customer | customer number (from 1 to 500) |
| gender | 1 if the customer is male, 0 if the customer is female |
| married | 1 if the customer is married, 0 if the customer is not married |
| income |
1 if income <= $30,000; 2 if $30,000 < income <= $45,000; 3 if $45,000 < income <= $60,000; 4 if $60,000 < income <= $75,000; 5 if $75,000 < income <= $90,000; 6 if income > $90,000 |
| first_purchase | value of the first purchase made by the customer in quarter 1 |
| loyalty | 1 if the customer is a member of the loyalty program, 0 if not |
| sow | share-of-wallet; the percentage of purchases the customer makes from the given firm given the total amount of purchases across all firms in that category |
| clv | discounted value of all expected future profits, or customer lifetime value |