Customer lifetime network value: customer valuation in the context of network effects

Miriam Däs, Julia Klier, Mathias Klier (), Georg Lindner and Lea Thiel
Additional contact information
Miriam Däs: University of Regensburg
Julia Klier: University of Regensburg
Mathias Klier: University of Ulm
Georg Lindner: University of Regensburg
Lea Thiel: University of Regensburg

Electronic Markets, 2017, vol. 27, issue 4, No 3, 307-328

Abstract: Abstract Nowadays customers are increasingly connected and extensively interact with each other using technology-enabled media like online social networks. Hence, customers are frequently exposed to social influence when making purchase decisions. However, established approaches for customer valuation mostly neglect network effects based on social influence. This leads to a misallocation of resources. Following a design-oriented approach, this paper develops a model for customer valuation referred to as the customer lifetime network value (CLNV) incorporating an integrated network perspective. By considering the customers’ net contribution to the network, the CLNV reallocates values between customers based on social influence. Inspired by common prestige- and eigenvector-related centrality measures it incorporates social influence among all degrees of separation acknowledging its viral spread. Using a real-world dataset, we demonstrate the practicable applicability of the CLNV to determine individual customers’ value.

Keywords: Customer valuation; Customer lifetime value; Social influence; Network effects (search for similar items in EconPapers)
JEL-codes: M10 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s12525-017-0255-4 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:elmark:v:27:y:2017:i:4:d:10.1007_s12525-017-0255-4

Ordering information: This journal article can be ordered from
http://www.springer. ... ystems/journal/12525

DOI: 10.1007/s12525-017-0255-4

Access Statistics for this article

Electronic Markets is currently edited by Rainer Alt and Hans-Dieter Zimmermann

More articles in Electronic Markets from Springer, IIM University of St. Gallen
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().