The Handbook of Marketing Research: Uses, Misuses, and Future Advances comprehensively explores the approaches for delivering market insights for fact-based decision making in a market-oriented firm. Divided into four parts, the Handbook addresses (1) the different nuances of delivering insights; (2) quantitative, qualitative, and online data gathering techniques; (3) basic and advanced data analysis methods; and (4) the substantial marketing issues that clients are interested in resolving through marketing research.
Chapter 29: Customer Lifetime Value
Customer Lifetime Value
In the past two decades, firms have tended to focus on either cost management or revenue growth. When a firm adopts one of these approaches, it loses out on the other (Rust, Lemon, & Zeithaml, 2004). For instance, if a firm focuses only on revenue growth without emphasis on cost management, it fails to maximize the profitability. Similarly, cost management without revenue growth affects the market performance of the firm. What is needed is an approach that balances the two, creating market-based growth while carefully evaluating the profitability and return on investment (ROI) of marketing investments. Optimal allocation of resources and efforts across profitable customers and cost-effective and customer-specific communication channels (marketing contacts) are the key to the success of ...