By Markus WÃ¼bben
The ever-increasing volume of individual-level client information generated through loyalty courses opens new views for shopper courting management(CRM). but, fresh research have proven that a large fraction of CRM initiatives fail to bring the great on the final analysis. one of many major purposes for this trouble is that those info require complex analytical processing to totally leverage their capability ("analytical CRM"). study and perform are nonetheless in its early levels with appreciate to analytical CRM.
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Additional info for Analytical CRM
2). Confer Brealey and Myers (2006, pp. 25-27) for a good overview on the rationale behind choosing shareholder-value maximization as the business objective for many corporations. , shareholder value. , a dollar today is worth more than a dollar tomorrow) and risk are ignored. Instead, Rappaport advocates the discounted cash ﬂow (DCF) valuation. , future cash ﬂows the investment generates over time adjusted for opportunity costs of forgone investment chances subtracted by the investment costs. This value is also called net present value (NPV) (Brealey and Myers 2006, p.
Customer equity is deﬁned as the total of the discounted lifetime values summed over all of the ﬁrm’s current and potential customers (Rust et al. 2004c, p. 2). The original deﬁnition by Blattberg and Deighton (1996, p. 138) only included current customers ignoring the value of potential customers for customer equity. , Hogan et al. 2002a; Bayón et al. 4) where i, j = customer index, n = number of current customers, m = number of potential customers, CLVicurrent = CLV of current customer i, and CLV jpotential = CLV of potential customer j.
Relationship depth is reﬂected in the frequency of service usage (product purchases) over time and decisions of customers to upgrade and purchase higher margin products instead of lowcost variants. , customers’ cross-buying behavior, has been identiﬁed as crucial for enhancing customers’ cash-ﬂows as well as reducing their volatility (Srivastava et al. 1998; 1999). This raises the question on what the drivers of relationship breadth are. , settings where buyer-seller relationships are not governed by a contract that predetermines the value and very often the length of the relationship (for 4 5 6 The urgency is also reﬂected in the Marketing Science Institute 2006-2008 research priorities, albeit in the context of explaining loyalty.
Analytical CRM by Markus WÃ¼bben