Strategies for maximizing customer equity of low lifetime value customers

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

The management of customer equity is becoming a major issue for firms. Traditionally, firms have concentrated on lifetime customer value and the assets that a firm can derive through relationships with customers who have high lifetime value or high equity. The majority of research in this area has examined strategies used to maximize sales and profits from high lifetime value customers. The present research examines strategies that firms need to follow with customers with low lifetime value. This paper suggests that firms develop strategies for "transactional" and "discount" customers who have traditionally been classified as low lifetime equity customers. Through an examination of extant literature and industry strategies the paper examines the reasons for ignoring these segments, and proposes strategies that will enhance segment penetration and firm performance. Implications for managers are also highlighted.

Original languageEnglish (US)
Pages (from-to)59-77
Number of pages19
JournalJournal of Relationship Marketing
Volume5
Issue number1
DOIs
StatePublished - Apr 4 2006

Keywords

  • CLV
  • CRM
  • CRM strategies
  • Customer equity
  • Customer lifetime value
  • Relationship equity

ASJC Scopus subject areas

  • Marketing

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