The authors evaluate the usefulness of customer lifetime value (CLV) as a metric for customer selection and marketing resource allocation by developing a dynamic framework that enables managers to maintain or improve customer relationships proactively through marketing contacts across various channels and to maximize CLV simultaneously. The authors show that marketing contacts across various ch...

Latent attrition models serve as the foundation for analyzing transactional customer relationships to derive forecasts of customer behavior and value. Yet, extant models often overlook the effects of direct marketing and how it is individually targeted. We propose a parsimonious model that allows for direct marketing to impact the frequency with which transactions occur, the monetary amount of ...

The Internet provides marketers with an expanded set of communications vehicles for reaching customers. Two of the most important and fast-growing elements of this new communications mix are online advertising and electronic word-of-mouth. While these vehicles provide new opportunities, they are also challenging marketers to understand how consumers respond and to develop new metrics for assess...

This report, prepared with the support of MSI and the Yaffe Center, is being sent to you for your information and review. It is not to be reproduced or published, in any form or by any means, electronic or mechanical, without written permission from the Institute and the author. Introduction This joint report of the Marketing Science Institute and the University of Michigan's Yaffe Center for P...