Application of Hidden Markov Model to CRM

What are some of the applications of a HMM in the marketing field - specifically CRM and targeted marketing?

For example, is it mainly for predicting an outcome given a sequence? Such as if web site visitor visits {Page 2, Page 54, page 23} what is the probability they will $<next>$ visit page 22? Or visit page 22 in that session?

Is HMM a stand alone technique or normally coupled with other things?

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CRM? (Yes, I know what it is. But, it helps to define such things within the question.) – cardinal Dec 7 '11 at 3:10

2 Answers

It sounds like you're looking for an n-order Markov model and not a hidden Markov model. Typically, an HMM would be useful if you wanted to identify hidden states at each selection in a series of selections. An n-order Markov model would give you the conditional probability of choosing the n+1'st state given the previous n states, which would be useful in the example you just described.

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DaRob: Do you have any tutorials to point towards for this model? – B_Miner Dec 7 '11 at 0:25

A google search for 'hidden markov model marketing' turned up this paper: A Hidden Markov Model of Customer Relationship Dynamics. Google scholar and the references in the above paper may turn up a few more applications of HMM in marketing.

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