Mining the network value of customers

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Mining the network value of customers

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International Conference on Knowledge Discovery and Data Mining archive
Proceedings of the seventh ACM SIGKDD international conference on Knowledge discovery and data mining table of contents

San Francisco, California

Pages: 57 - 66

Year of Publication: 2001

ISBN:1-58113-391-X

Authors

Pedro Domingos	University of Washington, Seattle, WA
Matt Richardson	University of Washington, Seattle, WA

Sponsors

SIGMOD: ACM Special Interest Group on Management of Data
AAAI : American Association for Artificial Intelligence

Publisher

ACM New York, NY, USA

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Downloads (6 Weeks): 57, Downloads (12 Months): 375, Citation Count: 73

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ABSTRACT

One of the major applications of data mining is in helping companies determine which potential customers to market to. If the expected profit from a customer is greater than the cost of marketing to her, the marketing action for that customer is executed. So far, work in this area has considered only the intrinsic value of the customer (i.e, the expected profit from sales to her). We propose to model also the customer's network value: the expected profit from sales to other customers she may influence to buy, the customers those may influence, and so on recursively. Instead of viewing a market as a set of independent entities, we view it as a social network and model it as a Markov random field. We show the advantages of this approach using a social network mined from a collaborative filtering database. Marketing that exploits the network value of customers---also known as viral marketing---can be extremely effective, but is still a black art. Our work can be viewed as a step towards providing a more solid foundation for it, taking advantage of the availability of large relevant databases.

REFERENCES

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