There is a very subtle line separating the customer retention and customer loyalty activities that must be followed by a business. The distinction between the two was elegantly expressed by Francis Frei in her column:

In part 1 of this series, we described how a small manufacturer of automotive parts is trying to develop cost models for 22 different product lines. Rather than develop an individual cost model for each of the products, we suggested the use of a cluster analysis technique to bunch several similar products together and work on a reduced set.

We have dedicated several articles to discuss the application of cost modeling in business using predictive analytics. We now expand the business process of developing cost models for companies which have a multitude of products.