Investment is the choice by the individual to risk his savings with the hope to acquite a profitable gain. Indeed, in the best cases, the acquisition of an asset is the consequence of the expectation of future flows of income that will exceed the initial cost of the acquisition. Customer, as a current or potential source of income for the firm, is seen as the "raison d'être? of the supplier. Thus, investing in customers relationship seems to be one of the ways to distinguish from competitors and thus, to generate and maximize revenue. Those investments influence customers' perception, customers' satisfaction and customers' loyalty. The definition of customers as "off-balance-sheet intangible assets? and as "the expected sum of discounted future earnings? (Gupta et al., 2004) trigger off various issues. First, they are intangible, unpredictable and consequently their own will constitutes a risky feature to the concerned firm.
[...] Rewarding offers to the most loyal customers . to encourage them to spend more and more often on their vacancies and also to get a positive word of mouth effect. Article selection: “How Expedia reaps more than subscribers in one month.” Expedia used a “viral marketing” operation to launch its French Website at the end of June 2004. This online communication campaign emphasis on the positioning “sur-mesure trip”. The game was based on the simple principle that the more you invite people to play the game the more you increase your chances to win. [...]
[...] Thus, the authors are transforming the customer base into a customer portfolio. The challenge is to select customers to achieve a desired rate of profit, taking into account the firm's tolerance of risk. The strength of this method using customers' portfolios is clearly to increase the average cash flow per customer with an expansion of the lifetime value associated to an appropriate level of risk. The firm has to select desirable customers to maximize the return of the overall customers' portfolios by acquiring and retaining specific customers. [...]
[...] - And the proportion of referred people that would have become customers independently of the referral. Unfortunately, this model is difficult to quantify and cannot be mathematically integrated in any calculation of a value but in reducing acquisition costs (Hogan, Lehmann, et al. (2002)). Nonetheless, in regards to marketing action plans, WOM reveals its interest by the way of influencing customer's choice of products. The strategy of investment is now clearer: the calculation of either CLV or RALTV, in addition to an analysis of environment and social effects, help evaluating adequately the value of costumers (CE). [...]
[...] McGovern et al. (2004), for example, propose a dashboard, which provides among others an indication about the most significant business drivers to measure marketing productivity. This is one proposition, but the research needs to go further in this issue. But in a sense, can't we consider that this problem brings us back to the customer value measurement question dealt with in the first part? Example: Expedia Study Case Expedia is an Internet-based travel agency. It books airline tickets, hotel reservations, car rentals, cruises, vacation packages, and various attractions and services via the World Wide Web and telephone travel agents. [...]
[...] Then, he defines a different marketing strategy for each group of customers. In the article, it is more the intensity and nature of the relationship with this group that is discussed, but this automatically corresponds with a certain amount of investment. More money will be invested in the portfolio with high spread and high duration, in order to develop a close relationship with those customers for instance Longer Relationship The last dimension of a customer's value is the length of the relationship with this customer. [...]
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