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Implementing profitability through a customer lifetime value management framework

Author

Listed:
  • Kumar V.

    (Is the Richard and Susan Lenny Distinguished Chair Professor of Marketing, and Executive Director, Center for Excellence in Brand & Customer Management, J. Mack Robinson College of Business, Georgia State University, Atlanta)

  • Venkatesan R.

    (Is an Associate Professor of Business Administration at the Darden Graduate School of Business, University of Virginia, Charlottesville)

  • Rajan B.

    (Is a Marketing Intelligence Analyst at the Center for Excellence in Brand & Customer Management, J. Mack Robinson College of Business, Georgia State University, Atlanta)

Abstract

Global CRM software spending was $7.8 billion in 2007 and is projected to reach $8.9 billion in 2008. Further, CRM software sales will touch $13.3 billion by 2012. These software and processes have made it possible for companies to gather and analyze large amounts of data on their existing and prospective customers. This article shows how customer-level data can lead to increased customer profitability through (a) selection of the right customers by using the Customer Lifetime Value (CLV) metric, (b) the nurturing of those right customers and, © re-allocation of resources to the profitable customers. Due to this approach profitable management of individual customers is the basis for growth in firm profitability. A case study will show how IBM used CLV as an indicator of customer profitability and allocated marketing resources based on CLV

Suggested Citation

  • Kumar V. & Venkatesan R. & Rajan B., 2009. "Implementing profitability through a customer lifetime value management framework," GfK Marketing Intelligence Review, Sciendo, vol. 1(2), pages 32-43, November.
    • Handle: RePEc:vrs:gfkmir:v:1:y:2009:i:2:p:32-43:n:5
    DOI: 10.2478/gfkmir-2014-0076
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    Cited by:

    1. Said Echchakoui, 2018. "An analytical model that links customer-perceived value and competitive strategies," Journal of Marketing Analytics, Palgrave Macmillan, vol. 6(4), pages 138-149, December.

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