The Impact of Customer Relationship Characteristics on Profitable Lifetime Duration

  title={The Impact of Customer Relationship Characteristics on Profitable Lifetime Duration},
  author={Werner J. Reinartz and V. Kumar},
  journal={Journal of Marketing},
  pages={77 - 99}
The authors develop a framework that incorporates projected profitability of customers in the computation of lifetime duration. Furthermore, the authors identify factors under a manager's control that explain the variation in the profitable lifetime duration. They also compare other frameworks with the traditional methods such as the recency, frequency, and monetary value framework and past customer value and illustrate the superiority of the proposed framework. Finally, the authors develop… Expand

Figures and Tables from this paper

Analysis of customer lifetime value model: Literature review
The financial performance of a company is evaluated by two models in the marketing and sale phase of business cycle: tactically oriented customer profitability analysis model (CPA) and strategicallyExpand
Customer Relationship Management: Maximizing Customer Lifetime Value
An inherent difficulty in the practice of Customer Relationship Management is that the development of marketing policies that optimize the value of a firm's customer assets requires fairlyExpand
The Risk of Using 'Customer Lifetime Value (CLV)' in Managing Marketing
Customer Lifetime Value (CLV) is a great metric used to identify the most valuable clients for a company. When implementing this metric, the company has to take into account several issues: a)Expand
Modeling Customer Lifetime Value
As modern economies become predominantly service-based, companies increasingly derive revenue from the creation and sustenance of long-term relationships with their customers. In such an environment,Expand
Modeling Customer Churn: An Application of Duration Models
For the last decade, Portuguese customers of fixed telecommunications have easily switched the service provider, which has been very damaging for the business performance. This study aims to developExpand
The Impact of Dependence on the Assessment of Customer Lifetime Value in Buyer-Seller Relationships
This paper links two important areas of relationship marketing: dependence between buyers and sellers and the assessment of customer lifetime value in business-to-business relationships. It suggestsExpand
Assessing lifetime profitability of customers with purchasing cycles
Purpose The purpose of this paper is to propose a method to help firms assess lifetime profitability of customers whose buying behaviors are characterized by purchasing cycles, which areExpand
Profitable relationships with key customers: how suppliers manage pricing and customer risk
Increasingly, the measurement and management of customer profitability and customer lifetime value are recognized as important elements in marketing's contribution to shareholder value. In recentExpand
A marketing view of the customer value: Customer lifetime value and customer equity
Throughout this research the customer valuation trend in marketing is going to be reviewed, emphasizing Customer Lifetime Value and Customer Equity measures. The main theoretical contributions in theExpand
The antecedents of customer lifetime duration and discounted expected transactions: Discrete-time based transaction data analysis
Maintaining long-term customer relationships and increasing customer value are always the two crucial objectives in service management and relationship marketing. Both researchers and marketExpand


A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction
Many service organizations have embraced relationship marketing with its focus on maximizing customer lifetime value. Recently, there has been considerable controversy about whether there is a linkExpand
A Customer Lifetime Value Framework for Customer Selection and Resource Allocation Strategy
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
Customer Profitability in a Supply Chain
Estimating current profitability at the individual customer level is important to distinguish the more profitable customers from the less profitable ones. This is also a first step in developingExpand
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
A Dynamic Model of Customers’ Usage of Services: Usage as an Antecedent and Consequence of Satisfaction
As firms seek ways to manage customer relationships over the long term, understanding the dynamics of the service provider–customer relationship becomes a key priority. In this article, the authorsExpand
Effects of Relationship Marketing on Satisfaction, Retention, and Prices in the Life Insurance Industry
Complex, highly intangible services such as life insurance consist largely of credence properties. Insurance providers engage in relationship-building activities that emphasize buyer-sellerExpand
the topic (a) has been dedicated to extolling its use as a decisionmaking criterion; (b) has presented isolated numerical examples of its calculation/determination; and (c) has considered it as partExpand
Balancing Acquisition and Retention Resources to Maximize Customer Profitability
In this research, the authors present a modeling framework for balancing resources between customer acquisition efforts and customer retention efforts. The key question that the framework addressesExpand
Service quality, profitability, and the economic worth of customers: What we know and what we need to learn
In the past, expenditures on quality have not been explicitly linked to profits because costs and savings were the only variables on which information was available. More recently, evidence about theExpand
A dynamic model of customers' usage of services : usage as an antecedent and consequence of satisfaction
As firms seek ways to manage customer relationships over the long term, understanding the dynamics of the service provider–customer relationship becomes a key priority. In this article, the authors...