Clv Customer Essay

4337 words - 17 pages

gy
:
ui
ity,
nsti
Hyo
Ha
tion
t ca
a w
customers, to foster customers' full profit potential. Corporate success depends on an organization's ability to build and maintain loyal and valued
reminded of the 80/20 rule (80% of the profits are produced by
Expert Systems with Applica
South Korea. Tel.:C82 33 248 1835; fax:C82 33 256 3424.
E-mail address: hshwang@hallym.ac.kr (H.-S. Hwang).
customer relationships. Therefore, it is essential to build refined strategies for customers based on their value.
In this paper, we propose a framework for analyzing customer value and segmenting customers based on their value. After segmenting
customers based on their value, strategies building according to customer segment will be illustrated through a case study on a wireless
telecommunication company.
q 2005 Elsevier Ltd. All rights reserved.
Keywords: Customer lifetime value; Customer segmentation; Data mining
1. Introduction
Customer Relationship Management (CRM) has become a
leading business strategy in highly competitive business
environment. CRM can be viewed as 'Managerial efforts to
manage business interactions with customers by combining
business processes and technologies that seek to understand a
company's customers' (Kim, Suh, & Hwang, 2003). Compa-
nies are becoming increasingly aware of the many potential
benefits provided by CRM. Some potential benefits of CRM are
as follows: (1) Increased customer retention and loyalty, (2)
Higher customer profitability, (3) Creation value for the
customer, (4) Customization of products and services, (5)
Lower process, higher quality products and services (Jutla,
Craig, & Bodorik, 2001; Stone, Woodcock, & Wilson, 1996).
When evaluating customer profitability, marketers are often
top 20% of profitable customers and 80% of the costs are
produced by top 20% of unprofitable customers) (Duboff,
1992; Gloy, Akridge, & Preckel, 1997).
The core parts of CRM activities are understanding
customers' profitability and retain profitable customers
(Hawkes, 2000). To cultivate the full profit potentials of
customers, many companies already try to measure and use
customer value in their management activities (Gloy, Akridge,
& Preckel, 1997; Rosset, Neumann, Eick, Vatnik, & Idan,
2002; Verhoef, & Donkers, 2001). Therefore, many firms are
needed to assess their customers' value and build strategies to
retain profitable customers.
This paper aims at suggesting a new LifeTime Value (LTV)
model and customer segmentation considering customer
defection and cross-selling opportunity. We will also propose
marketing strategies after segmenting customer base. This
paper is organized as follows. Section 2 reviews the previous
Customer segmentation and strate
lifetime value
Su-Yeon Kim a, Tae-Soo Jung b, E
a School of Computer and Information Technology, Daegu Univers b Department of Management Strategy, Samsung Economic Research I
c Department of Industrial Engineering, POSTECH, San 31, d Department of Business...

Find Another Essay On clv customer

Human Resource Management: Training and Development

988 words - 4 pages applicableKnowledge Area Score Knowledge Area Score1. Technical 4. Account Management1a. Account management 4a. Executive presentations1b. Certification #1 4b. Customer relationships1c. Certification #2 4c. Customer communication1d. Technical skill #1 4d. Customer meetings1e. Technical skill #2 4e. Customer business plans1f. Technical skill #3 4f. Customer quarterly reviews1g. Technical skill #4 4g. Customer file maintenance1h. Other: 4h. Account directory2

Principle of management Essay

1033 words - 4 pages period. It is a possible indicator of customer dissatisfaction, cheaper and/or better offers from the competition, more successful sales and/or marketing by the competition, or reasons having to do with the customer life cycle.In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value(LTV) and a new concept of "customer life cycle management" is the present value of the future cash flows attributed to the customer

Harley Davidson. Nordstrom

1179 words - 5 pages core competencies of Nordstrom are the highest level of customer service and superior product quality. Among other benefits one may outline the great variety of products available (upscale range) and trustworthiness of the brand. Nordstrom is selling top-quality apparel, handbags, accessories, jewelry, cosmetics, and fragrances. 2. Customer lifetime value (CLV) is the present value of future net profits attributed to the customers’ lifetime

hubspot

1806 words - 7 pages Marketer Marys Monthly profit $250 $500 Customer lifetime (months) 23.26 31.25 Acquisition cost $1000 $5000 3 Steenburgh, Avery, and Dahod. "Harvard Business School." Hubspot: Inbound Marketing and Web 2.0 9­509­049 (2011). Print. CLV = (monthly profit*customer lifetime in months) ­ (acquisition cost) (1/churn rate) 3 CASS BUSINESS SCHOOL, MSc Management, Group A9. CLV $4815 $10,625 Thus we conclude that the B2B segment of Owner Ollies

Resource Management

2341 words - 9 pages variable expenses for the project.During the implementation of the program, many issues and problems may arise especially if there are specific applications that were developed for the company. It is important to know that customer assistance is available when problems arise. In this case, customer service seems very limited. They are only contracted to come and aid in the initial installation and go-live stages of the project. This might not be

Computer Telephony Integration

2599 words - 10 pages streamline the customer service calls that are received on a daily basis. In order for the call to reach the agent there is a very intricate infrastructure in place to route the calls to the correct locations. Figure 1-1 below depicts the typical CTI call center configuration for a bank.Figure 1-1 Typical CTI Configuration (Computer Telephony Integration).According to John Silling, "When the call arrives at your company, your ACD or PBX strips off

ikea case analysis

2638 words - 11 pages customers. "They can help build long-term loyalty with high CLV [customer lifetime value] customers, creating cross-selling opportunities" (Kotler, Keller, 2012, p. 62, para. 3). Customers would be inspired to continue to purchase through IKEA instead of a different furniture retailer, as their purchases would result in a reward. The final recommendation is to open stores in locations near cities with high populations of college students, young

When the Bubble Burst

1539 words - 6 pages By the time I arrived state side from my second tour in the Middle East the housing bubble had already burst. I noticed a drastic change in the way that many of my friends and family were living. Several of my friends that worked in real estate had sold their boats and seconds houses. My own stock portfolio had lost a third of its value. My sister and her husband had defaulted on their home mortgage leaving them scrambling for a place to live. I

phase diagram

4456 words - 18 pages Introduction: Chemical equilibrium is a crucial topic in Chemistry. To represent and model equilibrium, the thermodynamic concept of Free energy is usually used. For a multi-component system the Gibbs free energy is a function of Pressure, Temperature and quantity (mass, moles) of each component. If one of these parameters is changed, a state change to a more energetically favorable state will occur. This state has the lowest free energy

Revolutionary Work of Art

1890 words - 8 pages Walter Benjamin emphasizes in his essay, “The Work of Art in the Age of its Technological Reproducibility” that technology used to make an artwork has changed the way it was received, and its “aura”. Aura represents the originality and authenticity of a work of art that has not been reproduced. The Sistine Chapel in the Vatican is an example of a work that has been and truly a beacon of art. It has brought a benefit and enlightenment to the art

Enlightenment Thought in New Zealand Schools

1594 words - 6 pages In this essay I will be looking at how the political and intellectual ideas of the enlightenment have shaped New Zealand Education. I will also be discussing the perennial tension of local control versus central control of education, and how this has been affected by the political and intellectual ideas of the enlightenment. The enlightenment was an intellectual movement, which beginnings of were marked by the Glorious Revolution in Britain

Similar Essays

Customer Loyality Essay

524 words - 2 pages what the useful alternatives are.In the study, the authors define the customer's loyalty as 'a customer's likelihood to choose a particular brand with reference to their past purchases'. By this definition, the behavior is made out to be both an attitudinal commitment and something that becomes habit forming.The authors also touch a little on Customer lifetime Value (CLV) which can be defined as the current value of any potential profits of a

Customer Satisfaction And Awareness Of Apple Laptop

1538 words - 6 pages are some problem associated with calculating CLV and to solve these problems two issues must be taken into consideration. Firstly, the company should define the purpose of using CLV analysis and the expected benefit. Secondly, the company has to select the most appropriate way to apply this concept in its particular situation. Defining customer is the first challenge then linking customer information into single customer record come after

Customer Relationship Management Essay

2340 words - 9 pages to that of customer lifetime value (CLV) defined by Ryals (2005) as the net present value of all future customer profits (future revenue stream less future cost to serve the customer). This is supported by the argument that “CLV is rapidly gaining acceptance as a metric to acquire, grow, and retain the ‘right’ customers in CRM. Marketing theory and practice has become more and more customer centered sic, and managers have increased their

Alibaba Essay

1699 words - 7 pages ;به CLV ارائه داد که این فرمول توسط Carpenter نیز مورد استفاده قرار گرفت پارامترها: GC: مقدار