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Customer-Based Valuation

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  • Gupta, Sunil

Abstract

Customer lifetime value (CLV) has emerged as an important metric to manage and grow customers. Marketing scholars have written many books and articles on this topic. However, most of this research has focused on tactical marketing decisions. While this is important, it is not enough to gain attention of senior managers who are concerned about firm level metrics such as stock price. To have greater impact marketing needs to go beyond brand-level profits to show the impact of marketing actions on firm profitability. In this paper we focus on customer lifetime value and its link to firm value. We discuss research that provides customer-based valuation of firms and suggest directions for future research.

Suggested Citation

  • Gupta, Sunil, 2009. "Customer-Based Valuation," Journal of Interactive Marketing, Elsevier, vol. 23(2), pages 169-178.
    • Handle: RePEc:eee:joinma:v:23:y:2009:i:2:p:169-178
    DOI: 10.1016/j.intmar.2009.02.006
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    References listed on IDEAS

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    1. Kamel Jedidi & Carl F. Mela & Sunil Gupta, 1999. "Managing Advertising and Promotion for Long-Run Profitability," Marketing Science, INFORMS, vol. 18(1), pages 1-22.
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    4. Neslin, Scott A. & Shankar, Venkatesh, 2009. "Key Issues in Multichannel Customer Management: Current Knowledge and Future Directions," Journal of Interactive Marketing, Elsevier, vol. 23(1), pages 70-81.
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    6. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
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    8. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
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    Citations

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    Cited by:

    1. Risselada, Hans & Verhoef, Peter C. & Bijmolt, Tammo H.A., 2010. "Staying Power of Churn Prediction Models," Journal of Interactive Marketing, Elsevier, vol. 24(3), pages 198-208.
    2. Kumar, V. & Pozza, Ilaria Dalla & Petersen, J. Andrew & Shah, Denish, 2009. "Reversing the Logic: The Path to Profitability through Relationship Marketing," Journal of Interactive Marketing, Elsevier, vol. 23(2), pages 147-156.
    3. Even, Adir & Shankaranarayanan, G. & Berger, Paul D., 2010. "Managing the Quality of Marketing Data: Cost/benefit Tradeoffs and Optimal Configuration," Journal of Interactive Marketing, Elsevier, vol. 24(3), pages 209-221.
    4. Hemant K. Bhargava, 2022. "The Creator Economy: Managing Ecosystem Supply, Revenue Sharing, and Platform Design," Management Science, INFORMS, vol. 68(7), pages 5233-5251, July.
    5. Lee, Hyoung-joo & Shin, Hyunjung & Hwang, Seong-seob & Cho, Sungzoon & MacLachlan, Douglas, 2010. "Semi-Supervised Response Modeling," Journal of Interactive Marketing, Elsevier, vol. 24(1), pages 42-54.
    6. Blattberg, Robert C. & Malthouse, Edward C. & Neslin, Scott A., 2009. "Customer Lifetime Value: Empirical Generalizations and Some Conceptual Questions," Journal of Interactive Marketing, Elsevier, vol. 23(2), pages 157-168.
    7. Manral, Lalit & Harrigan, Kathryn R., 2018. "The logic of demand-side diversification: Evidence from the US telecommunications sector, 1990–1996," Journal of Business Research, Elsevier, vol. 85(C), pages 127-141.
    8. Glady, Nicolas & Lemmens, Aurélie & Croux, Christophe, 2015. "Unveiling the relationship between the transaction timing, spending and dropout behavior of customers," International Journal of Research in Marketing, Elsevier, vol. 32(1), pages 78-93.
    9. repec:tiu:tiutis:52e91e47-4a2d-4e7b-bb23-3926b842ae30 is not listed on IDEAS
    10. Malthouse, Edward C. & Haenlein, Michael & Skiera, Bernd & Wege, Egbert & Zhang, Michael, 2013. "Managing Customer Relationships in the Social Media Era: Introducing the Social CRM House," Journal of Interactive Marketing, Elsevier, vol. 27(4), pages 270-280.
    11. Fader, Peter S. & Hardie, Bruce G.S., 2009. "Probability Models for Customer-Base Analysis," Journal of Interactive Marketing, Elsevier, vol. 23(1), pages 61-69.

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    Keywords

    Customer lifetime value; Firm valuation;

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