Analyzing the Applications of Customer Lifetime Value (CLV) based on Benefit Segmentation for the Banking Sector

egmentation is central to marketing strategy because different customer groups imply the need for different marketing mixes. The technique of segmenting a market also reveals profit opportunities and strategic matter for new competitors to challenge established market leaders. As a market develops, new segments open up and older ones tend to decline. So, achieving a reliable and valid approach to segment the market for any activity-based markets is necessary. This study aims to understand a good approach to segment the market namely benefit segmentation based on customer lifetime value. Benefit segmentation is an approach to market segmentation whereby it is possible to identify market segments by causal factors rather than descriptive factors. On the other hand a valuable tool for measuring the real values of customers is customer lifetime value or CLV. The more a marketing paradigm evolves, the more long-term relationship with customers gains its importance. CLV aims to measure a just real value of customers of special part of market. Thus CLV is a basic valuable tool to understanding the benefits segmentation strategy. This paper aims to propose a framework to measure the value of each segment of customers based on the CLV calculation with focus on banking sector