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Abstract
Inductive three categories of indicators that aviation effects customer value: flight value indicators, partnership value indicator, loyalty value indicator, and based on the expert investigation method give different weights to different types of index, in addition, its contribution to customer value is described. As to class containing many indicator variables, principal component analysis method is applied to analyze indexes which influence the customer value, according to the calculation formula to calculate comprehensive score of customer value, and sort out after normalizing the total scores into percentile scores, and sorting. According to different member group value, different marketing strategies are designed, in order to achieve maximum profits. Keywords: Airlines; Weight Setting; Principal Component Analysis; Value Evaluation
1 INTRODUCTION
In the fierce market competition, for airlines, how to meet customer needs and to identify valuable customers are the important parts of implementation of marketing strategy. Having fully grasped customer conditions and behaviors by customer segmentation, airlines can implement diversity efficient marketing strategies and customer services for different kinds of customers [1]. Frequent flyer (hereinafter referred to as the members) is the most precious resources of aviation enterprise. Using high quality rating score prediction model, each member is given a score, to assess the value of customers and potential customers, according to the output of the model, and operating department intuitively judges the values of members based on the scores, which provides the corresponding service standards[2]. The main work of analysis based on the customer value is to determine the key factors of customer value assessment. Customer value assessment model established is applied to the frequent flyer program business process. Based on each customers comprehensive quantitative assessment of value and loyalty, targeted value mining strategy is developed. By improving the high value of customers loyalty, mining the potential value of low customer, makes the contribution of customer value maximization.
Step1:Using expert investigation to determine flight value, partners value, the proportion of the loyalty value, and thus acquiring their final value weights (w1, w2, w3); Step2:Based on principal component analysis method to calculate the flight value and loyalty value of customers; Step3: Take advantage of weights given by Step1, and compute the customer total value score, i.e. Score = w1 * Flight value + w2 * Partner Value + w3 * Loyalty value Step4: Normalize the total score into percentile scores, and sorting. -2www.sjae.org
2) Expert Investigation Weight Analysis Three civil aviation senior experts are extracted, and then paired comparison method in AHP analysis method is adopted which is proposed by Satie, to gather judgment matrix produced by experts and then by comparing three types of index, the respective feature vectors are adopted, finally average to obtain ratio of various types of indicators (0.7312,0.1251,0.1437). 3) The Principal Component Analysis Model Through exploration-type data analysis, data are prepared that the analysis needs, choose the appropriate data mining tools and data mining technology to construct customer value model. Principal component analysis aims to use the idea of dimensionality reduction, and further to turn the multi-index into a few composite indicators. In the study of empirical question, in order to comprehensively and systematically analyze the problem, we must consider a number of factors. Because each variable to a different extent reflects some information on such issues, and the indexes have a certain correlation with each other, thus resulting in the information statistics reflected to some extent of overlapping. When studying multivariate problems by a statistical method, many variables may increase the computational and complexity of the analyzed problem, fewer variables are expected to be involved and a higher amount of information is obtained in the process of a quantitative analysis. Principal component analysis is exactly implemented to meet this requirement, and the ideal tool is to solve such problems. Airline customer value model mainly uses principal component analysis. The SAS analysis tools are used to analyze airlines customer value, and the steps are as follows.
TABLE 2 MEMBER VALUE ANALYSIS PROCESS USING SAS
Step1: Integrate data according to business needs, extract the key variables for involving and modeling from the original table. Step2: Data preprocessing, if the value of a key extracted variable mentioned above is empty, the average discount rate is set greater than 1.03 to 1.03. Then summarize the results after these processing, further to examine data, until each index value is in line with business requirements Step3: Eliminate dimension impact on the results, and normalize the data got by step2 Step4: Do correlation analysis of data in step 3, according to the Pearson correlation coefficient test rules, inspect whether the data is suitable for principal component analysis or not. Step5: Do principal component analysis of the data after normalization, and keep the main component satisfied the rule. Step6: Calculate member value scores.
According to score formula: Z1 1 * Pr in1 2 * Pr in2 3 * Pr in3 4 * Pr in4 , each members flight value score is calculated. Do principal component analysis on loyalty variables, and the eigenvalues are: 1.36, 0.95, 0.69, of which the first two principal components accumulated variance account for 78% of total variance taking as the score calculation variables, and the coefficients relationship with the original variables are shown in Table 3.
TABLE 4 COEFFICIENT RELATIONSHIP BETWEEN PRINCIPAL COMPONENTS WITH THE ORIGINAL VARIABLE
According to score formula: Z2 1 * Pr in1 2 * Pr in2 , each members loyalty value score is calculated. For Intuitive comparison on business applications, generally it need to be standardized composite score, i.e. standardize membership scores to [0,100] range, with the customary centesimal system representation compare members value, then centesimal scores are divided into 12 intervals, the top 1% of the high value of the member, the top 1% to 5% before the members, and so on, and the final form is shown in Table 4, an interval score distribution table.
TABLE 4 MEMBER STANDARD SCORES AND INTERVAL (partial)
Interval 99 99 99 95 95 95 95 95
Percentile scores 16 16 14 9 11 9 7 12
Similarly component principal of loyalty is calculated through principal component computation, as well as the score, finally each of the three categories of the main indicators is weighted and overall scores are obtained. The same process for training samples is adopted to compute membership value score and its interval, then the same members are selected as training sample; thus getting the following table 6.
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4 CONCLUSION
Different weights of different types of indicators have been calculated, and class containing many indicator variables has been evaluated, by using principal component analysis method, to obtain the membership value score. Finally, each scores was synthesized to obtain total membership value score, meantime, the total scores were normalized into centesimal system and according to its score value intervals were divided, which allows marketers to determine the customer's value orientation quickly. According to different member group value, different marketing strategies have been designed, so as to achieve maximum profits. Next step is customer segmentation based on customer value analysis, and according to the value, members are divided into different groups, in order to analyze characteristics of each group members, and therefore, targeted, personalized service and marketing initiatives are taken.
ACKNOWLEDGMENTS
The work was supported by Open Project Foundation of Information Technology Research Base of Civil Aviation Administration of China (NO. CAAC-ITRB-201206).
REFERENCES
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AUTHORS
Guohe Feng (1971- ), male, Professor, Ph.D. Master Instructor. His research field is data mining, digital library, system, and in management papers. Email: ghfeng@163.com information Xiaoxiao Zhang (1989- ), female, postgraduate. Xia Feng (1970- ), female, Professor, Ph.D. Master Instructor. Yun Xue (1975- ), male Associate Professor, Ph.D. Master Instructor.
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