This article develops a framework for assessing how mar- keting actions affect customers’ lifetime value to the firm. The framework is organized around four critical actions that firms must take to effectivelymanage the asset value of the customer base: database creation, market segmenta- tion, forecasting customer purchase behavior, and re- source allocation. In this framework, customer lifetime value is treated as a dynamic construct, that is, it influences the eventual allocation of marketing resources but is also influenced by that allocation. By viewing customers as assets and systematically managing these assets, a firm can identify the most appropriate marketing actions to ac- quire, maintain, and enhance customer assets and thereby maximize financial returns. The article discusses in detail how to assess customer lifetime value and manage cus- tomers as assets. Then, it identifies key research challenges in studying customer asset management and the managerial challenges associated with implementing ef- fective customer asset management practices.
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