Measuring the Lifetime Value of a Customer in the Consumer Packaged Goods Industry

Sunder, Sarang; Kumar, V.; Zhao, Yizhi

doi:10.1509/jmr.14.0641

Cited by 20 publications

(11 citation statements)

References 55 publications

(92 reference statements)

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“…• While Sunder, Kumar, and Zhao (2016) have bridged the gap in literature by proposing a structural approach to measuring CLV that incorporates the choice, timing, and quantity decisions of consumers to assess CLV in the CPG setting, future studies in this area can look into expanding the analysis for a basket of goods, and including stochastic shocks to the system that might influence the consumption. • Literature has shown that customer behavior influences CLV (Reinartz and Kumar 2003) and that customer attitudes influence customer behavior (e.g., Anderson 1998;Hogan, Lemon, and Libai 2003), which in turn influences CLV.…”

Section: Key Insights and Future Research Directionsmentioning

confidence: 99%

“…With respect to value from customers, this study has identified several areas for future research. For instance, while a structural approach to measuring CLV that incorporates the choice, timing, and quantity decisions of consumers to assess CLV in the CPG setting has been proposed (Sunder, Kumar, and Zhao 2016), more studies in this area are needed to formalize this learning. Specifically, studies that can expand the specific product-level categorization to include a basket of goods will facilitate the study of CLV from a retailer's perspective.…”

Section: Key Insights and Future Research Directionsmentioning

confidence: 99%

“…However, the results have been suboptimal because conclusions regarding the quantity decision could not be made effectively. Sunder, Kumar, and Zhao (2016) adopt a direct utility approach to structurally model multiple discreteness while accounting for variety-seeking behavior in the demand model in assessing CLV of consumers in the consumer packaged goods (CPG) setting. Furthermore, the study is conducted on a longitudinal transaction database and allows the budget to vary deterministically with time.…”

Section: How Should Value From Customers Be Measured and Managed?mentioning

confidence: 99%

See 2 more Smart Citations

Creating Enduring Customer Value

Kumar

Reinartz

2016

Journal of Marketing

Self Cite

496

382

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One of the most important tasks in marketing is to create and communicate value to customers to drive their satisfaction, loyalty, and profitability. In this study, the authors assume that customer value is a dual concept. First, in order to be successful, firms (and the marketing function) have to create perceived value for customers. Toward that end, marketers have to measure customer perceived value and have to provide customer perceptions of value through marketing-mix elements. Second, customers in return give value through multiple forms of engagement (customer lifetime value, in the widest sense) for the organization. Therefore, marketers need to measure and manage this value of the customer(s) to the firm and have to incorporate this aspect into real-time marketing decisions. The authors integrate and synthesize existing findings, show the best practices of implementation, and highlight future research avenues.

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Section: Key Insights and Future Research Directionsmentioning

confidence: 99%

Section: Key Insights and Future Research Directionsmentioning

confidence: 99%

Section: How Should Value From Customers Be Measured and Managed?mentioning

confidence: 99%

See 1 more Smart Citation

Creating Enduring Customer Value

Kumar

Reinartz

2016

Journal of Marketing

Self Cite

496

382

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“…Furthermore, research has also shown that changes in consumers' economic constraints have varying effects on their profit-contributing potential. For instance, Sunder, Kumar, and Zhao (2016) demonstrated that high-CLV customers are least affected by changes in their budgetary constraints when compared with low-CLV customers. Therefore, if a country has a high GDP and high purchasing power, its consumers will have more disposable income and spend more.…”

Section: Between Firms and Customers Reducesmentioning

confidence: 99%

A Theory of Customer Valuation: Concepts, Metrics, Strategy, and Implementation

Kumar

2018

Journal of Marketing

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Customer value refers to the economic value of the customer's relationship with the firm. This study approaches the topic of customer value for measuring, managing, and maximizing customer contributions by proposing a customer valuation theory (CVT) based on economic principles that conceptualizes the generation of value from customers to firms. The author reviews the established economic theories for valuing investor assets (e.g., stocks) and draws a comparison to valuing customer contributions. Furthermore, the author recognizes the differences in the guiding principles between valuing stocks and valuing customers in proposing CVT. Using CVT, the author discusses the concept of customer lifetime value (CLV) as the metric that can provide a reliable, forward-looking estimate of direct customer value. In addition, economic models to estimate CLV, ways to manage CLV using portfolio management principles, and strategies to maximize CLV are discussed in detail. The author extends the customer value concept by discussing ways that a customer can add value to the firm indirectly through incentivized referrals, social media influence, and feedback. Finally, the benefits of CVT to multiple constituencies are offered.

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“…Past studies focus on the measurement and applications of customer lifetime value (Chang et al 2012). Following Rust et al (2004), some scholars address the measurement of customer lifetime value in specific contexts such as banking industry (Ekinci et al 2014) and consumer packaged goods industry (Sunder et al 2016). Past studies have applied customer lifetime value in the contexts of luxury brands and Spanish telecommunication services (Segarra-Moliner, Mliner-Tena 2016).…”

Section: Customer Lifetime Valuementioning

confidence: 99%

Predicting Customer Lifetime Value for Hypermarket Private Label Products

Lin

Wang

et al. 2017

Journal of Business Economics and Management

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This study develops a model to predict customer lifetime value for hypermarket private label products. It examines the relationships among store awareness, store image variables (i.e., service quality, price/value, convenience, and product quality), private label image, repurchase intention, and customer lifetime value and investigates the moderating role of image fit. The originality of this study lies in filling the gap of previous research on antecedents of private label customers’ behavior by considering store awareness, image fit, and customer lifetime value. Partial least squares structural equation modeling was used to analyze data. The results indicate the following. Store image variables (except product quality) and store awareness affect repurchase intention directly or indirectly through private label image. Image fit moderates the relationships between store image variables (except product quality) and private label image. Private label image facilitates customer lifetime value. This study provides several theoretical and practical implications for hypermarket private label product developments.

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Measuring the Lifetime Value of a Customer in the Consumer Packaged Goods Industry

Cited by 20 publications

References 55 publications

Creating Enduring Customer Value

Creating Enduring Customer Value

A Theory of Customer Valuation: Concepts, Metrics, Strategy, and Implementation

Predicting Customer Lifetime Value for Hypermarket Private Label Products

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