The Impact of Forward-Looking Metrics on Employee Decision-Making: The Case of Customer Lifetime Value

2016 ◽  
Vol 92 (3) ◽  
pp. 31-56 ◽  
Author(s):  
Pablo Casas-Arce ◽  
F. Asis Martínez-Jerez ◽  
V. G. Narayanan
Keyword(s):  
Decision Making ◽  
Default Risk ◽  
Customer Value ◽  
Customer Lifetime Value ◽  
Customer Relationship ◽  
Significant Shift ◽  
Customer Lifetime ◽  
Lifetime Value ◽  
The Impact ◽  
Forward Looking

ABSTRACT This paper analyzes the effects of forward-looking metrics on employee decision-making. We use data from a bank that started providing branch managers with the customer lifetime value (CLV)—an estimate of the future value of the customer relationship—of mortgage applicants. The data allow us to gauge the effects of enriching the employees' information set in an environment where explicit incentives and decision rights remained unchanged. On average, customer value increased 5 percent after the metric's introduction. The metric's availability resulted in a significant shift in attention toward more profitable client segments and some improvement in cross-selling. However, the use of CLV did not negatively impact pricing or default risk, as the literature predicts. Finally, branch managers with shorter tenure displayed a stronger response, consistent with information substituting for experience.

Customer Lifetime Value: A Review

2012 ◽  
Vol 40 (7) ◽  
pp. 1057-1064 ◽  
Author(s):  
Wen Chang ◽  
Chen Chang ◽  
Qianpin Li
Keyword(s):  
Customer Relationship Management ◽  
Critical Review ◽  
Development Process ◽  
Relationship Management ◽  
Customer Lifetime Value ◽  
Customer Relationship ◽  
Review Of The Literature ◽  
Customer Lifetime ◽  
Lifetime Value

The concept of regarding customers as assets that should be managed and whose value should be measured is now accepted and recognized by academics and practitioners. This focus on customer relationship management makes it extremely important to understand customer lifetime value (CLV) because CLV models are an efficient and effective way to evaluate a firm's relationship with its customers. Assessment of CLV is especially important for firms in implementing customer-oriented services. In this paper we provide a critical review of the literature on the development process and applications of CLV.

Customer Lifetime Value Measurement using Machine Learning Techniques

2014 ◽  
pp. 565-573
Author(s):  
Tarun Rathi ◽  
Vadlamani Ravi
Keyword(s):  
Machine Learning ◽  
Customer Value ◽  
Customer Lifetime Value ◽  
Machine Learning Techniques ◽  
Support Vector ◽  
Customer Lifetime ◽  
Learning Techniques ◽  
Lifetime Value ◽  
Additive Regression ◽  
Or Organization

Customer Lifetime Value (CLV) is an important metric in relationship marketing approaches. There have always been traditional techniques like Recency, Frequency and Monetary Value (RFM), Past Customer Value (PCV) and Share-of-Wallet (SOW) for segregation of customers into good or bad, but these are not adequate, as they only segment customers based on their past contribution. CLV on the other hand calculates the future value of a customer over his or her entire lifetime, which means it takes into account the prospect of a bad customer being good in future and hence profitable for a company or organization. In this paper, we review the various models and different techniques used in the measurement of CLV. Towards the end we make a comparison of various machine learning techniques like Classification and Regression Trees (CART), Support Vector Machines (SVM), SVM using SMO, Additive Regression, K-Star Method and Multilayer Perception (MLP) for the calculation of CLV.

A conceptual framework to explain the relationship among electronic customer relationship management and electronic customer lifetime value: investigation the antecedents and presentation a structural model

2018 ◽  
Vol 4 (10) ◽  
pp. 185-193
Author(s):  
Mohammad Safari
Keyword(s):  
Conceptual Framework ◽  
Customer Relationship Management ◽  
Relationship Management ◽  
Business Environment ◽  
Customer Lifetime Value ◽  
Customer Relationship ◽  
Electronic Business ◽  
Customer Lifetime ◽  
Lifetime Value ◽  
The Relationship

This study investigates the relationship between electronic customer relationship management (CRM) and electronic customer lifetime value and their analysis in the electronic business environment in the form of a conceptual framework. CRM is a tool that different industries, especially in competitive conditions, use to maintain customers and increase their satisfaction. An important concept that arises as customer lifetime value that specifies the expected amount of value that the client in a given period of time creates is undoubtedly related to the benefits that accrue to the organisation. The global nature of business as well as the development of information and communication technology is forcing organisations to take advantage of emerging technologies to maintain their competitiveness. The use of e-business is a prominent example. The results of this study could help both researchers and executives of organisations and businesses with the subject of research, and provide good insights for them. Keywords: Electronic business (e-Business), electronic customer relationship management (e-CRM), electronic customer lifetime value (e-CLV), relationship marketing;

scholarly journals A marketing view of the customer value: Customer lifetime value and customer equity

2013 ◽  
Vol 44 (4) ◽  
pp. 47-64 ◽  
Author(s):  
A. M. Estrella-Ramón ◽  
M. Sánchez-Pérez ◽  
G. Swinnen ◽  
K. VanHoof
Keyword(s):  
Customer Value ◽  
Customer Lifetime Value ◽  
Customer Equity ◽  
Future Research ◽  
Customer Profitability ◽  
Profitability Analysis ◽  
Customer Lifetime ◽  
Lifetime Value ◽  
Equity Measures

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 the development and evolution of the Customer Lifetime Value concept are analysed. Customer Lifetime Value is also differentiated from Customer Equity and Customer Profitability analysis to estimate customer value in terms of firm profitability. Customer Lifetime Value and Customer Equity concepts are formally defined. Additionally, a classification of a set of published researches into Customer Lifetime Value and/or Customer Equity is developed. This classification has been posited according to several criteria that serves as a guide to key requirements for developing these types of models. Finally,several conclusions, suggestions and future research streams are highlighted.

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