Citation:
Lynette Ryals and Simon Knox, Measuring Risk-adjusted Customer Lifetime Value and its Impact on Relationship Marketing Strategies and Shareholder Value. European Journal of Marketing, 2005, Volume 39, Issue 5/6, pp456-472
Abstract:
The calculations which underlie efforts to balance marketing spending on
customer acquisition and customer retention are usually based on either single-
period customer profitability or forecasts of customer lifetime value (CLTV).
This paper argues instead for risk-adjusted CLTV, which is termed the economic
value (EV) of a customer, as the means for marketing to assess both customer
profitability and shareholder value gains.