Practice Prize Report - The Power of CLV: Managing Customer Lifetime Value at IBM

@article{Kumar2008PracticePR,
  title={Practice Prize Report - The Power of CLV: Managing Customer Lifetime Value at IBM},
  author={V. Kumar and Rajkumar Venkatesan and Timothy Bohling and Denise Beckmann},
  journal={Mark. Sci.},
  year={2008},
  volume={27},
  pages={585-599}
}
Customer management activities at firms involve making consistent decisions over time, about: a which customers to select for targeting, b determining the level of resources to be allocated to the selected customers, and c selecting customers to be nurtured to increase future profitability. Measurement of customer profitability and a deep understanding of the link between firm actions and customer profitability are critical for ensuring the success of the above decisions. We present the case… Expand

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References

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Optimal Customer Relationship Management Using Bayesian Decision Theory: An Application for Customer Selection
This study addresses significant challenges that practitioners face when using customer lifetime value (CLV) for customer selection. First, the authors propose a Bayesian decision theory–basedExpand
Linking Customer Management Effort to Customer Profitability in Business Markets
Chain-link frameworks such as the service–profit chain (SPC) are much discussed as a means to link customer profits to operational resources under the influence of vendor managers, though empiricalExpand
A Customer Lifetime Value Framework for Customer Selection and Resource Allocation Strategy
TLDR
A dynamic framework that enables managers to maintain or improve customer relationships proactively through marketing contacts across various channels and to maximize CLV simultaneously is developed. Expand
RFM and CLV: Using Iso-Value Curves for Customer Base Analysis
TLDR
A new model is presented that links the well-known RFM (recency, frequency, and monetary value) paradigm with customer lifetime value (CLV) and is based on the Pareto/NBD framework to capture the flow of transactions over time and a gamma-gamma submodel for spend per transaction. Expand
On the Profitability of Long-Life Customers in a Noncontractual Setting: An Empirical Investigation and Implications for Marketing
Relationship marketing emphasizes the need for maintaining long-term customer relationships. It is beneficial, in general, to serve customers over a longer time, especially in a contractualExpand
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The authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the changeExpand
The 2003 ISMS Practice Prize Winner: Optimizing Rhenania's Direct Marketing Business Through Dynamic Multilevel Modeling (DMLM) in a Multicatalog-Brand Environment
We introduce Dynamic Multilevel Modeling DMLM to a multicatalog-brand environment to determine the optimal frequency, size, and customer segmentation of direct marketing activities. This optimizationExpand
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Abstract Through field experiments conducted in two business-to-business firms, the authors evaluate the financial and relational consequences of adopting a customer focus in sales campaigns. In bothExpand
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Because of their combinatorial complexity, multiple conflicting objectives, and personnel aspects that touch everyone in the salesforce, the alignment models were unable to completely solve the sales territory alignment issues faced by companies. Expand
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Customer Lifetime Value (CLV) is one of the key metrics in marketing and is considered an important segmentation base. This paper studies the capabilities of a range of models to predict CLV in theExpand
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