On the customer lifetime value: a mathematical perspective

R. Ferrentino (), M. T. Cuomo () and C. Boniello ()
Additional contact information
R. Ferrentino: University of Salerno
M. T. Cuomo: University of Salerno
C. Boniello: University of Salerno

Computational Management Science, 2016, vol. 13, issue 4, No 2, 539 pages

Abstract: Abstract The customer lifetime value (CLV) is an important concept increasingly considered in the field of general marketing and in the management of firms, of organizations to increase the captured profitability. It represents the total value that a customer produces during his or her lifetime, or better represents the measure of the potential profit generating by a customer. The companies use the customer lifetime value to segment customers, analyze probability of churn, allocate resources or formulate strategies and, therefore, they increasingly derive revenue from the creation and from sustenance of long-term relationships with their customers. For this reason, the customer lifetime value is increasingly considered a touchstone for the management of customer relationships. In this article, the authors deepen the concept and use of customer lifetime value and present some mathematical models for its determination. There is many models for this purpose but most of them are theoretic, complex and not applicable. Though not exhaustive, the major contribution of this paper is that it provides a general mathematical formulation to estimate the CLV and that it has a context less specific compared to papers, present in literature, on the customer lifetime.

Keywords: Customer lifetime value; Customer equity; Customer profitability; Customer retention; Persistence models (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://link.springer.com/10.1007/s10287-016-0266-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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:comgts:v:13:y:2016:i:4:d:10.1007_s10287-016-0266-1

Ordering information: This journal article can be ordered from
http://www.springer. ... ch/journal/10287/PS2

DOI: 10.1007/s10287-016-0266-1

Access Statistics for this article

Computational Management Science is currently edited by Ruediger Schultz

More articles in Computational Management Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().