Applications of CRM in B2B and B2C Scenarios (Part I)

V. Kumar () and Werner Reinartz
Additional contact information
V. Kumar: Georgia State University

Chapter 15 in Customer Relationship Management, 2012, pp 303-333 from Springer

Abstract: Abstract This chapter defines the concept of Customer Lifetime Value (CLV) and provides an approach to compute CLV. In simple terms, CLV refers to the net present value of future cash flows from a customer. Using a numerical example, this chapter provides the approach and formula to compute CLV. It also discusses the various drivers that can maximize CLV for both B2B and B2C firms. Further, the chapter discusses some of the proven strategies to maximize customer profitability. First, the chapter discusses the relationship between customer lifetime with the firm and the resulting profitability. Based on this relationship, this chapter discusses a model that can be used to measure the lifetime values of customers when they share a noncontractual relationship with the firm (i.e., a relationship in which customers are not bound by contracts). Second, a model for incorporating customers’ projected profitability into lifetime duration computation is discussed. This model builds on the idea and approach discussed in the first model. Finally, a model for identifying the true value of a lost customer is also discussed.

Keywords: Contribution Margin; Customer Lifetime Value; Loyal Customer; Purchase Amount; Customer Lifetime (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Chapter: Applications of CRM in B2B and B2C Scenarios Part I (2018)
Chapter: Applications of CRM in B2B and B2C Scenarios Part II (2018)
Chapter: Applications of CRM in B2B and B2C Scenarios (Part II) (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-642-20110-3_15

Ordering information: This item can be ordered from
http://www.springer.com/9783642201103

DOI: 10.1007/978-3-642-20110-3_15

Access Statistics for this chapter

More chapters in Springer Texts in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().