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Article

Using CLV concept for marketing budgets allocation

Journal of Business Market Management. 2013. Vol. 2. No. 6. P. 61-106.
Oyner O. K., Sukhorukova O.

The paper evaluates the usefulness of customer lifetime value (CLV) as a metric for marketing budget allocation by developing a framework that enables managers to maintain customer relationships proactively through different elements of marketing mix, in order to enhance brand equity and maximize CLV. The analysis is based on data from a hardware components PC B2B company and suggests that there is a potential for achieving a variety of long term goals when managers design resource allocation rules that maximize CLV. Marketing managers can use results of this study to guide their distribution decision so the effectively and efficiently reduce the costs associated with customer acquisition, enhance customer retention and increase customer profitability with marketing related activities.