Lifetime value model in the medical sector: a case study of a restoration and beauty clinic

Abstract

Purpose – Acquiring and retaining profitable customers are major concerns of a business. In this<br><br>paper, the customers of the Restoration and Beauty Clinic of Iran University are segmented using three<br><br>value types: current value, expected value, and loyalty in a case study to predict the probability of<br><br>customer churn and future purchase services in the clinic.<br><br>Design/methodology/approach – This study utilized customers’ data records with nine data fields<br><br>(socio-demographic and transactional) from three year’s transactions of the clinic. Logistic regression<br><br>as a data mining technique is then used to predict the future behavior of the customers. In addition, the<br><br>verification and the validation of the models are done using lift charts.<br><br>Findings – This research segments the customers of the clinic into four categories based on three<br><br>values (current value, expected value, and loyalty). Then simple marketing strategies that might be<br><br>adopted are suggested. These strategies might help the shareholders and experts of the clinic to<br><br>promote relationships with patients and deliver better services to attract and retain their customers.<br><br>Originality/value – The results of this research enable public health agencies to evaluate the<br><br>effectiveness of their policies and detect their shortcomings in order to better serve patients. Also,<br><br>it will help to increase their profits from the clinics and raise customer satisfaction.