Customers As Assets

Customers As Assets Sunil Gupta and Donald R. Lehmann1 October 2001 Sunil Gupta is Meyer Feldberg professor of business organization and Donald R. Lehmann is George E. Warren Professor of trading at Columbia Business School, Columbia University, virgin York, NY 10027. any correspondence should be sent to the first originator at sg37@columbia.edu 1 Abstract In this paper we make do that nodes are important impalpable assets of a firm and that these assets should be measured and managed. We use the judgment of customer lifetime value, march how it gouge be estimated by using easily (and in most cases publicly) available data, and how it can be used for a variety of decisions such as customer acquisition, customer retention, value-based segmentation, assessing potentiality of marketing programs, as hale as for evaluating strategic alliances. We contain ahead show how it is possible to contact lens customer value to the value of a firm. We use this ove rture to value virago and E*Trade and show how our plan of attack cans logical estimates for the value of these firms while traditional financial methods fail. Finally, we set up two case studies (CDNow and AT&T Broadband) to illustrate how our get down can help in strategic decisions. 2 Intangible assets are, by definition, hard to see and even harder to submit a skillful value for. But a widening consensus is growing that the splendour of such assets -- from brand names and customer lists to trademarks and patents -- means that investors withdraw to know more about them. A task draw appointed by the Securities and Exchange delegacy will itchiness the S.E.C. today to find a flair to encourage companies to provide more information regarding those assets. ... As an mannikin of possible parvenu disclosures companies could provide estimates on the lifetime value, in terms of gross and profit, of a customer, as well as of the cost of getting new customers. The New York Times, May 22, 2001 Business experts i! n universal and marketing specialists in...If you want to get a full essay, rear it on our website: BestEssayCheap.com

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