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Customer valuation as a foundation for growth

Duncan McDougall (Senior Associate, Boston, Massachusetts, USA. For more information about Mercer Management Consulting, Inc., contact at 1166 Avenue of the Americas, New York, NY 10036, USA, or at 1 Grosvenor Place, London SW1X 7HJ, UK)
Gordon Wyner (Vice‐President, Boston, Massachusetts, USA. For more information about Mercer Management Consulting, Inc., contact at 1166 Avenue of the Americas, New York, NY 10036, USA, or at 1 Grosvenor Place, London SW1X 7HJ, UK)
David Vazdauskas (Principal of Mercer Management Consulting, Boston, Massachusetts, USA. For more information about Mercer Management Consulting, Inc., contact at 1166 Avenue of the Americas, New York, NY 10036, USA, or at 1 Grosvenor Place, London SW1X 7HJ, UK)

Managing Service Quality: An International Journal

ISSN: 0960-4529

Article publication date: 1 February 1997

2154

Abstract

Customers differ widely in the long‐term value they represent to a company, and the “best” customers are often many times more valuable than the average ones. Cites four customer value components: acquisition cost, revenue stream, cost stream and length of relationship. Argues that by understanding and managing lifetime customer value, a company not only allocates resources to its customers more effectively, but also becomes better able to focus on developing long‐term customer relationships. Examines ways to calculate lifetime customer value and use it as the basis for strategy development.

Keywords

Citation

McDougall, D., Wyner, G. and Vazdauskas, D. (1997), "Customer valuation as a foundation for growth", Managing Service Quality: An International Journal, Vol. 7 No. 1, pp. 5-11. https://doi.org/10.1108/09604529710158157

Publisher

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MCB UP Ltd

Copyright © 1997, Company

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