Customer Value: From ABC Analysis to Customer Lifetime Value (CLV)

Summary Complex methods of calculating customer value, such as the Customer Lifetime Value (CLV), which are presented as the non-plus ultra in literature and science, have not yet become the standard tool in customer management in corporate practice. Models with a high degree of complexity are not always optimal in operational sales and marketing management. But even if the model approaches are simplified, it is important that company management, marketing, and sales managers ultimately receive clear instructions and decision support. It is crucial to decide on a customer value model that meets the needs of the company and is capable of providing targeted decision support. With a customer value model, it is also important to answer the question of whether there is a balance between cost and return. If taking all the aspects of the CLV approach into account is unrealistic for organizations, there are opportunities for simplification.