Marketing Actions and the Value of Customer Assets

This article develops a framework for assessing how marketing actions affect customers’lifetime value to the firm. The framework is organized around four critical actions that firms must take to effectively manage the asset value of the customer base: database creation, market segmentation, forecasting customer purchase behavior, and resource 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 acquire, maintain, and enhance customer assets and thereby maximize financial returns. The article discusses in detail how to assess customer lifetime value and manage customers as assets. Then, it identifies key research challenges in studying customer asset management and the managerial challenges associated with implementing effective customer asset management practices.

[1]  Peter C. Verhoef,et al.  Customer Equity: Building and Managing Relationships as Valuable Assets , 2002 .

[2]  J. Dupree.  Techno‐Ready Marketing: How and Why Your Customers Adopt Technology , 2002 .

[3]  Peter C. Verhoef,et al.  Driving Customer Equity, How Customer Lifetime Value is Reshaping Corporate Strategy , 2001 .

[4]  J. Wind,et al.  Customerization: The next revolution in mass customization , 2001 .

[5]  Philip Hans Franses,et al.  The impact of satisfaction and payment equity on cross-buying: A dynamic model for a multi-service provider , 2001 .

[6]  D. Bowman,et al.  Managing Customer-Initiated Contacts with Manufacturers: The Impact on Share of Category Requirements and Word-of-Mouth Behavior , 2001 .

[7]  Robert C. Blattberg,et al.  Customer Equity: Building and Man-aging Relationships as Valuable Assets , 2001 .

[8]  C. Narasimhan,et al.  Customer Profitability in a Supply Chain , 2001 .

[9]  Jacquelyn S. Thomas.  A Methodology for Linking Customer Acquisition to Customer Retention , 2001 .

[10]  Seybold Pb,et al.  Get inside the lives of your customers. , 2001 .

[11]  Nada Nasr Bechwati,et al.  The allocation of promotion budget to maximize customer equity , 2001 .

[12]  V. Mittal,et al.  Satisfaction, Repurchase Intent, and Repurchase Behavior: Investigating the Moderating Effect of Customer Characteristics , 2001 .

[13]  P. Seybold.  Get inside the lives of your customers. , 2001, Harvard business review.

[14]  E. Anderson,et al.  Strengthening the Satisfaction-Profit Chain , 2000 .

[15]  W. Reinartz,et al.  On the Profitability of Long-Life Customers in a Noncontractual Setting: An Empirical Investigation and Implications for Marketing , 2000 .

[16]  Mary Jo Bitner,et al.  Self-Service Technologies: Understanding Customer Satisfaction with Technology-Based Service Encounters , 2000 .

[17]  Roland T. Rust,et al.  Driving Customer Equity: How Customer Lifetime Value is Reshaping Corporate Strategy (Управление ценностью клиентуры: как ценность клиентской базы изменяет корпоративную стратегию) , 2000 .

[18]  W. Grassl.  Strategic Brand Management: Building, Measuring, and Managing Brand Equity. , 2000 .

[19]  A. Parasuraman,et al.  Technology Readiness Index (Tri) , 2000 .

[20]  Carrie M. Heilman,et al.  The Evolution of Brand Preferences and Choice Behaviors of Consumers New to a Market , 2000 .

[21]  D. Wittink,et al.  Building Models for Marketing Decisions , 2000 .

[22]  Dick R. Wittink,et al.  Building models for marketing decisions: past, present and future , 2000 .

[23]  John H. Roberts.  Developing new rules for new markets , 2000 .

[24]  Bernard J. Jaworski,et al.  Market-driven versus driving markets , 2000 .

[25]  Mary Jo Bitner,et al.  Technology infusion in service encounters , 2000 .

[26]  V. Zeithaml.  Service quality, profitability, and the economic worth of customers: What we know and what we need to learn , 2000 .

[27]  P. K. Kannan,et al.  Implications of loyalty program membership and service experiences for customer retention and value , 2000 .

[28]  Francis J. Mulhern,et al.  Customer Profitability Analysis: Measurement, Concentration, and Research Directions , 1999 .

[29]  Thomas C. Kinnear.  A Perspective on how Firms Relate to their Markets , 1999 .

[30]  R. Oliver.  Whence Consumer Loyalty? , 1999 .

[31]  Greg M. Allenby,et al.  A Dynamic Model of Purchase Timing with Application to Direct Marketing , 1999 .

[32]  Katherine N. Lemon,et al.  A dynamic model of customers' usage of services : usage as an antecedent and consequence of satisfaction , 1999 .

[33]  Katherine N. Lemon,et al.  A Dynamic Model of Customers’ Usage of Services: Usage as an Antecedent and Consequence of Satisfaction , 1999 .

[34]  Eric T. Bradlow,et al.  A hierarchical latent variable model for ordinal data from a customer satisfaction survey with no answer responses , 1999 .

[35]  E. Anderson.  Customer Satisfaction and Word of Mouth , 1998 .

[36]  William T. Ross,et al.  The Asymmetric Impact of Negative and Positive Attribute-Level Performance on Overall Satisfaction and Repurchase Intentions , 1998 .

[37]  D. W.,et al.  Customer lifetime value: Marketing models and applications , 1998 .

[38]  M. Wedel,et al.  Market Segmentation: Conceptual and Methodological Foundations , 1997 .

[39]  Bill Meade,et al.  Enterprise One to One: Tools for Competing in the Interactive Age , 1997 .

[40]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[41]  A. Parasuraman.  Reflections on gaining competitive advantage through customer value , 1997 .

[42]  R. B. Woodruff,et al.  Customer value: The next source for competitive advantage , 1997 .

[43]  F. Dwyer.  Customer lifetime valuation to support marketing decision making , 1997 .

[44]  M. Uncles,et al.  Do Customer Loyalty Programs Really Work , 1997 .

[45]  C. Fornell,et al.  The American Customer Satisfaction Index: Nature, Purpose, and Findings , 1996 .

[46]  Kannan Srinivasan,et al.  Estimating the Impact of Consumer Expectations of Coupons on Purchase Behavior: A Dynamic Structural Model , 1996 .

[47]  Robert C. Blattberg,et al.  Manage marketing by the customer equity test. , 1996, Harvard business review.

[48]  M. Keane,et al.  Decision-Making Under Uncertainty: Capturing Dynamic Brand Choice Processes in Turbulent Consumer Goods Markets , 1996 .

[49]  H. Vroman.  The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value , 1996 .

[50]  R. Rust,et al.  Indirect Financial Benefits from Service Quality , 1996 .

[51]  A. Roth,et al.  Strategic Determinants of Service Quality and Performance: Evidence from the Banking Industry , 1995 .

[52]  Paul D. Berger,et al.  New Customer Acquisition: Prospecting Models and the use of Commercially Available External Data , 1995 .

[53]  Paul Wang,et al.  Applications for the lifetime value model in modern newspaper publishing , 1995 .

[54]  D. Leonard-Barton,et al.  Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation , 1995 .

[55]  Manohar U. Kalwani,et al.  Long-Term Manufacturer-Supplier Relationships: Do They Pay off for Supplier Firms? , 1995 .

[56]  C. Fornell,et al.  Customer Satisfaction, Market Share, and Profitability: Findings from Sweden , 1994 .

[57]  Alan Dick,et al.  Customer loyalty: Toward an integrated conceptual framework , 1994 .

[58]  Gary W. Loveman,et al.  Putting the Service-Profit Chain to Work , 1994 .

[59]  Robert A. Peterson,et al.  Customer Base Analysis: An Industrial Purchase Process Application , 1994 .

[60]  Ruth N. Bolton,et al.  Linking Customer Satisfaction to Service Operations and Outcomes , 1994 .

[61]  Ruth N. Bolton,et al.  A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction , 1994 .

[62]  R. Rust,et al.  Return on Quality: Measuring the Financial Impact of Your Company's Quest for Quality , 1993 .

[63]  P. Rajan Varadarajan,et al.  An Analysis of the Market Share-Profitability Relationship , 1993 .

[64]  R. Rust,et al.  Customer satisfaction, customer retention, and market share , 1993 .

[65]  E. Anderson,et al.  The Antecedents and Consequences of Customer Satisfaction for Firms , 1993 .

[66]  Paul D. Berger,et al.  The effect of sample size and proportion of buyers in the sample on the performance of list segmentation equations generated by regression analysis , 1992 .

[67]  R. Srivastava,et al.  Applying Latent Trait Analysis in the Evaluation of Prospects For Cross-Selling of Financial Services , 1991 .

[68]  CaponNoel,et al.  Determinants of Financial Performance , 1990 .

[69]  J. Farley,et al.  Determinants of Financial Performance: A Meta-Analysis , 1990 .

[70]  F. F. Reichheld,et al.  Zero defections: quality comes to services. , 1990, Harvard business review.

[71]  Paul D. Berger,et al.  Direct Marketing Management , 1989 .

[72]  David C. Schmittlein,et al.  Counting Your Customers: Who-Are They and What Will They Do Next? , 1987 .

[73]  Carl P. Zeithaml,et al.  Environmental Management: Revising the Marketing Perspective , 1984 .

[74]  Lung-fei Lee,et al.  Asymptotic Covariance Matrices of Two-Stage Probit and Two-Stage Tobit Methods for Simultaneous Equations Models with Selectivity , 1980 .

[75]  J. Heckman.  Sample selection bias as a specification error , 1979 .

[76]  J. Heckman.  The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models , 1976 .

[77]  Yoram Wind,et al.  Industrial Source Loyalty , 1970 .