Approaches to the measurement and management of customer value

Approaches to the measurement and management of customer value

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Article ID: iaor200891
Country: United States
Volume: 5
Issue: 2/3
Start Page Number: 37
End Page Number: 54
Publication Date: Apr 2006
Journal: Journal of Relationship Marketing
Authors: , ,
Keywords: customer care
Abstract:

Determining and managing customer lifetime value is one of the most important strategic objectives of companies today. This paper critically examines some of the most popular approaches traditionally used to measure the value of customers in a company's portfolio. The methods reviewed include RFM and total revenue approaches to differentiating the value of customers. Although these methods have relative advantages, they have serious drawbacks that limit the ability of managers to accurately assess customer value. An alternative model for the measurement and management of customer value is proposed.

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