1. CLV 2 Lab Richard MICHON Ted Rogers School of Management Ryerson University, Toronto

2. Outline 1. Select product category 2. Compute a file extraction date 3. Calculate # of months on file 4. Calculate # of months since last purchase 5. Define customer status (Active or Lapsed) 6. Auto recode string value (channel) into numeric value 7. Recode MOF into YOF (for annual spending) 8. Create life tables by acquisition channels 9. Calculate average annual spending by acquisition channel, by YOF 10. Import annual survival rate and annual spending into Excel CLV spreadsheet.

3. 1. Select product category Select product category from 0 to 9 according to the last digit on work station DATA  SELECT CASE  IF CONDITION IS SATISFIED IF PRODUCTAREA_FIRST = ? CONTINUE CLICK DELETE UNSELECTED CASE

4. 2. Compute a file extraction date TRANSFORM  COMPUTE VARIABLE TARGET VARIABLE: Extraction_Dte FUNCTION GROUP = DATE CREATION DATE.Dmf NUMERIC EXPRESSION: DATE(31,12,2007) OK GO TO VARIABLE VIEW REDEFINE Extraction_Dte FROM NUMERIC TO DATE FORMAT yyyy/mm/dd

5. 3. Calculate # of months on file TRANSFORM  DATE AND TIME WIZARD CALCULATE WITH DATES AND TIMES  NEXT CALCULATE THE NUMBER OF TIME UNITS BETWEEN TWO DATES  NEXT DATE 1: Last_Purchase_Dte MINUS DATE 2: First_Purchase_Dte TIME UNIT: Months CLICK SELECT ROUND TO INTEGER  NEXT NAME VARIABLE: MOF (Months on File)

6. 4. Calculate # of months since last purchase REFER TO SLIDE 3 ….. DATE 1: Extraction_Dte MINUS DATE 2: Last_Purchase_Dte TIME UNIT: Months CLICK SELECT ROUND TO INTEGER  NEXT NAME VARIABLE: MSP (Months since Last Purchase)

7. 5. Define customer status (Active or Lapsed) TRANSFORM  RECODE INTO ANOTHER VARIABLES MSP  NEW VARIABLE Status OLD AND NEW VALUES RANGE FROM LOWEST TO 18 RECODE AS 0 RANGE FROM 18 TO HIGHEST RECODE AS 1 CONTINUE  OK GO IN VARIABLE VIEW DEFINE Status VALUE LABEL AS 0 = Active 1 = Lapsed

8. 6. Auto recode string value (channel) into numeric value TRANSFORM  AUTOMATIC RECODE SELECT Channel_first (String variable) NAME NEW VARIABLE Channel OK

9. 7. Recode MOF into YOF (for annual spending) TRANSFORM  RECODE INTO A DIFFERENT VARIABLE SELECT ‘MOF’, CREATE NEW NAME ‘YOF’ OLD AND NEW VALUES RANGE FROM … THROUGH … 0-12  1 12-24  2 24-36  3

10. 8. Create life tables by acquisition channels ANALYSE  SURVIVAL –> LIFE TABLES TIME: ‘MOF’ FROM 0 TO 36 BY 12 STATUS: Status = 1 FACTOR: Channel

11. 10. Calculate average annual spending by acquisition channel, by YOF, for active customers DATA  SELECT CASES  IF Status = 0 FILTER OUT UNSELECTED CASES (Do not delete) ANALYSE  COMPARE MEANS  MEANS DEPENDENT VARIABLE: Amount INDEPENDEN VARIABLES: Channel  NEXT ‘YOF’ DATA  SELECT CASES  SELECT ALL CASES (Remove filter)

12. 10. Import annual survival rates and annual spending into Excel CLV spreadsheet. YOU’RE DONE! READY FOR SURVEYMONKEY