Customer Lifetime Value Model
Paper No. T.9-2.1, pp. 1-4
The 6th PSU-UNS International Conference on Engineering and
Technology (ICET-2013), Novi Sad, Serbia, May 15-17, 2013
University of Novi Sad, Faculty of Technical Sciences
MODIFIED CLV CONCEPT FOR USE IN
TURBULENT ECONOMIES
Milan Brkljač, M.Sc.*
*
e-mail: brkljacm@uns.ac.rs
Abstract: Doing business in modern economies and markets is challenge for all market participants. In order to fulfill needs of their customers companies are putting efforts in implementation of customer relationship management concept. Different studies have shown that not all customers are desirable from profitable point of view. Therefore, many concepts have been developed for classifying desirable customers, among which is
Customer Lifetime Value (CLV). Problem of applying
CLV occurs in turbulent economic environments which suffer from high inflation rates and illiquidity among companies, especially in B2B market segments. This paper has a purpose to put accent on the need for modifying the CLV concept in order to gain more accurate data about customers in such turbulent environments. Key Words: CLV, CRM, turbulent economies
1. INTRODUCTION
Complexity of business relationships, both on local and international markets, has led to the emerging need for development and application of marketing concept.
In its basis, doing business in market economies has evolved together with marketing concept, rejecting the production approach as dominant and introducing approach of long-term customer relationships through customer relationship management (CRM).
One of the major change in management`s focus, due to the fact that none of the companies could satisfy all of its customers, neither with quality nor the quantity, was narrowing to smaller market segments. As author
Vasiljev says: “market segmentation, in its basis, represents noticing the similarities and identifying special homogeneous groups of customers”1. Thereby market segmentation is the baseline for development
The 6th PSU-UNS International Conference on Engineering and
Technology (ICET-2013), Novi Sad, Serbia, May 15-17, 2013
University of Novi Sad, Faculty of Technical Sciences
MODIFIED CLV CONCEPT FOR USE IN
TURBULENT ECONOMIES
Milan Brkljač, M.Sc.*
*
e-mail: brkljacm@uns.ac.rs
Abstract: Doing business in modern economies and markets is challenge for all market participants. In order to fulfill needs of their customers companies are putting efforts in implementation of customer relationship management concept. Different studies have shown that not all customers are desirable from profitable point of view. Therefore, many concepts have been developed for classifying desirable customers, among which is
Customer Lifetime Value (CLV). Problem of applying
CLV occurs in turbulent economic environments which suffer from high inflation rates and illiquidity among companies, especially in B2B market segments. This paper has a purpose to put accent on the need for modifying the CLV concept in order to gain more accurate data about customers in such turbulent environments. Key Words: CLV, CRM, turbulent economies
1. INTRODUCTION
Complexity of business relationships, both on local and international markets, has led to the emerging need for development and application of marketing concept.
In its basis, doing business in market economies has evolved together with marketing concept, rejecting the production approach as dominant and introducing approach of long-term customer relationships through customer relationship management (CRM).
One of the major change in management`s focus, due to the fact that none of the companies could satisfy all of its customers, neither with quality nor the quantity, was narrowing to smaller market segments. As author
Vasiljev says: “market segmentation, in its basis, represents noticing the similarities and identifying special homogeneous groups of customers”1. Thereby market segmentation is the baseline for development
References: [1] L. Ryals, „Managing Customers Profitably“, John Wiley & Sons Ltd, England, 2008. thesis, University of Novi Sad, Faculty of Economics Subotica, Novi Sad, 2012. Darden Business Publishing, 2005. [6] S. Vasiljev, „Marketing“, četvrto izdanje, Prometej, Novi Sad, 2005. 16, No.3, 2011. pp. 53-61.