Our main objective in this paper is to measure the value of customers acquired from Google search advertising accounting for two factors that have been overlooked in the conventional method widely adopted in the industry: the spillover effect of search advertising on customer acquisition and sales in offline channels and the lifetime value of acquired customers. By merging web traffic and sales...

Product recommendation is a business activity that is critical in attracting customers. Accordingly, improving the quality of a recommendation to fulfill customers’ needs is important in fiercely competitive environments. Although various recommender systems have been proposed, few have addressed the lifetime value of a customer to a firm. Generally, customer lifetime value (CLV) is evaluated i...

Based on accepted advances in the marketing, economics, consumer behavior, and satisfaction literatures, we develop a micro-foundations model of a firm that needs to manage the quality of a product that is inherently heterogeneous in the presence of varying customer tastes or expectations for quality. Our model blends elements of the returns to quality, customer lifetime value, and service prof...

Customer value analysis is critical for a good marketing and a customer relationship management strategy. An important component of this strategy is the customer retention rate. Customer retention rate has a strong impact on the customer lifetime value, and understanding the true value of a possible customer churn will help the company in its customer relationship management. Conventional stati...

Valuing customers is a central issue for any commercial activity. The customer lifetime value (CLV) is the discounted value of the future profits that this customer yields to the company. In order to compute the CLV, one needs to predict the future number of transactions a customer will make and the profit of these transactions. With the Pareto/NBD model, the future number of transactions of a ...

The benefi t of managing customer relationship by inputs (acquisition and retention costs) and outputs (revenues) for each customer is that marketing managers can better prioritise their efforts by examining the return on marketing investment and thus better differentiate customers by their relative benefi ts and costs. Valuing customers and measuring marketing effect using only direct fi nanci...

This paper provides insights into assessing customer relationships in a revenue management environment and depicts methodological problems that may arise in this context. For this purpose, we formulate a multi-period deterministic linear programing model, which accounts for customers’ future demand behavior being dependent on the provider’s previous availability decisions. Moreover, on the basi...