The authors develop a framework that incorporates projected profitability of customers in the computation of lifetime duration. Furthermore, the authors identify factors under a manager’s control that explain the variation in the profitable lifetime duration. They also compare other frameworks with the traditional methods such as the recency, frequency, and monetary value framework and past cus...

Our main objective in this paper is to measure the value of customers acquired from Google search advertising accounting for two factors that have been overlooked in the conventional method widely adopted in the industry: the spillover effect of search advertising on customer acquisition and sales in offline channels and the lifetime value of acquired customers. By merging web traffic and sales...

Business executives can answer such questions by focusing on customer equity—the total of the discounted lifetime values of all the firm’s customers. A strategy based on customer equity allows firms to trade off between customer value, brand equity, and customer relationship management. We have developed a new strategic framework, the Customer Equity Diagnostic, that reveals the key drivers inc...