Developing a new data envelopment analysis model for customer value analysis

This paper proposes an application of data envelopment analysis (DEA) to measure the value of customers. In order to distinguish between expectations and needs of profitable and unprofitable customers and to allocate marketing investments among them, customers are compared with each other and ranked in a customer value pyramid. To this end, we use a combination of the Banker, Charnes and Cooper (BCC) model [3], assurance region (AR) model, and cross-efficiency evaluation. A numerical example demonstrates the application of the proposed model in an Iranian manufacturing company.