Customer Lifetime Value: An application in the rural petroleum market

Brent A. Gloy, Jay Akridge and Paul Preckel ()
Additional contact information
Brent A. Gloy: Purdue University, Department of Agricultural Economics, West Lafayette, Indiana, Postal: Purdue University, Department of Agricultural Economics, West Lafayette, Indiana

Agribusiness, 1997, vol. 13, issue 3, 335-347

Abstract: As building long term customer relationships becomes paramount to the success of agricultural input marketers, a question of focus is raised: Which customers should the firm attempt to build such relationships with? Customer Lifetime Value (CLV) is a concept some marketers have employed to better understand the long-term profit potential of specific customers or groups of customers. CLV is the net present value of the cash flow stream a customer is expected to generate for a firm over time. In this study, the CLV concept was employed to better understand the profitability of customers in the rural petroleum market. Findings suggest that customers in this market vary dramatically in the level of profits they generate for a firm. In addition, customer retention is important in this market with small reductions in customer retention rates leading to large reductions in CLV. A framework and modeling approach is also developed that marketers in other agribusiness industries may find useful as they attempt to measure and use customer lifetime value. © 1997 John Wiley & Sons, Inc.

Date: 1997
References: View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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

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:wly:agribz:v:13:y:1997:i:3:p:335-347

DOI: 10.1002/(SICI)1520-6297(199705/06)13:3<335::AID-AGR7>3.0.CO;2-1

Access Statistics for this article

Agribusiness is currently edited by Ronald W. Cotterill

More articles in Agribusiness from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().