Effect of Social Media Interactions on CLV in Telecommunications

Abstract

The main goal of this study is to investigate whether social media, as a recent communication channel, has an impact on customer lifetime value (CLV). No studies have been done in Turkey with similar purposes in the telecommunication sector. To reach this goal, there has been an attempt to develop both artificial neural network models and sector-specific applicable models. Four years of data between 2011 and 2014 belonging to customers in the telecommunication sector who have a Twitter account are used in this study. The CLV is modeled through radial basis function (RBF), multilayer perceptron (MLP), and Elman neural network approaches, and the performance of such models is compared. According to the findings, calculated CLV error values are at an acceptable range in all formed models. Additionally, it is determined that the CLV was calculated with a lower error value in models where social media variables were used. The Elman neural network is determined to perform better compared to RBF and MLP.