Firm valuation from customer equity: When does it work and when does it fail?

Shoutong Thomas Zhang

International Journal of Research in Marketing, 2016, vol. 33, issue 4, 966-970

Abstract: Is customer equity a good proxy for a firm's market value? Using data from Netflix over 10years, I provide evidence that a CLV-based customer equity model tracks market capitalization remarkably well under versatile conditions of stable growth, profit volatility, and even a broad market crash. However, if a firm shifts business model through radical innovation, the customer equity model requires recalibration to continue tracking market capitalization.

Keywords: Customer lifetime value; Customer equity; Innovation (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ijrema:v:33:y:2016:i:4:p:966-970

DOI: 10.1016/j.ijresmar.2016.03.007

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