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Managing Customers as Investments

Managing Customers as Investments

Managing Customers as Investments

The Strategic Value of Customers in the Long Run

by Donald Lehmann & Sunil Gupta

In Managing Customers as Investments, business professors Sunil Gupta and Donald R. Lehmann offer a set of tools that shows you the correlation between your customer assets and the value of your firm. They explain the triggers that drive this value, and how to better manage your customers and, as a result, your shareholders’ wealth. They unlock the metrics, show you where you are and where you’re going, and provide you with the tools and tips to make your customer-related efforts more efficient.

What You'll Learn

  • How customers are assets. Customers are typically the primary source of earnings for a company. If you can estimate the value of current and future customers, then you can determine the true value of your firm.
  • How to calculate the value of your customers simply. If you know the profit generated from a customer, as well as your average retention/defection rate, you can use a very simple equation to estimate the lifetime value of that customer.
  • How customer value can drive your marketing strategies. Effective customer-based marketing strategies take into consideration the value that a firm provides to a customer, and the value of a customer to the firm.
  • How your organization must change. Shifting to a customer-based mind-set in your business means that old product-based practices and processes must be jettisoned.
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