CUSTOMER LIFETIME VALUE AS THE 21 ST CENTURY MARKETING STRATEGY APPROACH

CUSTOMER LIFETIME VALUE AS THE 21 ST CENTURY MARKETING STRATEGY APPROACH Rožek, J., Karlíček, M. Many sudies show ha markeing has recenly los is sraegic posiion wihin companies. Cusomer Lifeime Value represens a relaively new approach o reesablishing markeing s posiion as he core managemen insrumen in marke driven companies. The main goal of his paper is o summarize he curren developmen and basic principles of he Cusomer Lifeime Value concepual model, which ses cusomers back ino he posiion of key company asses. The paper presens ndings ha prove he need for a markeing focus change in order o be able o properly manage cusomer relaionships and secure a company s long-erm susainable developmen. JEL classicaion: M31 Keywords: Cusomer Lifeime Value; Cusomer Equiy; Cusomer Relaionship; Cusomer Lifecycle 1. Inroducion In marke driven companies, a cusomer and his needs are viewed as he basic arge of all he company s aciviies (Webser Jr., 2005; Koler & Keller, 2011). As menioned and proven in many sudies, marke orienaion fosers he compeiive posiion of he companies and creaes a signican compeiive advanage (Slaer & Narver, 2000; Jaworski & Kohli, 1993; Koler & Keller, 2011; Webser Jr., 2005; Sheh & Sisodia, 2007). Markeing should herefore ac as a hink ank and he leader of he company s sraegy. Neverheless, oday s realiy shows a differen siuaion. More han on sraegy, markeing focuses is aciviy on acical and operaional business asks (Sheh & Sisodia, 2006). A recen sudy among 227 Czech markeing managers proved ha he mos powerful deparmen in consiuing he overall corporae sraegy is, in 54.9% of cases, no markeing bu he sales deparmen. Markeing represened he leading role only in 14% of cases (Karlí ek & Drábik, 2012). There are many reasons why markeing has los is sraegic inuence and according o Brown (1995), markeing has enered a mid-life crisis of represenaion. Some of he main aribues of his markeing crisis can be summarized ino ve main poins, which have been idenied by differen researchers: narrow ypecasing of markeing funcions and accounabiliies (Davies & Ardley, 2011); markeing funcion marginalizaion (Schlosser & Mcnaughon, 2007); shifing of markeing responsibiliies o oher funcional specialiss (Webser Jr., Maler, & Ganesan, 2005); insensiiviy o environmenal changes wih a focus on shor-erm goals (Koler, Inerview: Philip Koler, 2004); lack of business analyical and accouning skills (Cassidy, Freeling, & Kiewell, 2005). These issues lead o he failure of markeing o creae, deliver and communicae he added value of is aciviies wihin he organizaion. From he exernal poin of view, he core issue can be found in he fac ha markeing sraegies are focused on responses o compeiion raher han on he cusomer or he company s sraegic marke posiion (Economis Ineligence Uni, 2006). More han oher deparmens, markeing has an inensive cross-funcional posiion hrough which he inernal aciviies are ranslaed and formulaed ino direc conac wih he cusomer. Unforunaely, he relaionship beween markeing and oher deparmens (mainly sales) is ofen problemaic. This lack of cooperaion negaively affecs inerfuncional performance wihin he rm and herefore he overall performance of he company (Dewsnap & Jobber, 2000). The main issues in cross funcional cooperaion ha decrease he effeciveness of markeing are differen skills and means of markeing aciviies, differen objecives and accounabiliies and differen evaluaion process of markeing represenaives 28

in comparison o colleagues from oher funcional deparmens (Mahyssens & Johnson, 2006). All hese variaions lead o a misundersanding of he markeing role wihin he company. In oher words, non-markeing deparmens view heir markeing represenaives as risk-aking colleagues wih low analyical skills and accounabiliy (McGovern, Cour, Quelch, & Crawford, 2004). For example, an inernaional sudy conduced among 1 700 CMOs showed ha one of he main drawbacks of markeing oday is he view of is inabiliy o manage and repor markeing oucomes. One of he main reasons behind his siuaion is he lack of nancial knowledge and insufcien echnical skills of markeing represenaives (IBM Global Business, 2011). Similarly, a sudy conduced by The Economis Inelligence Uni (2006) showed ha op managemen is dissaised wih he abiliies of markeing represenaives o measure he resuls of markeing campaigns. There is signican pressure on he markeing deparmen for higher accounabiliy. There is no doub ha markeing needs a radical change in erms of is posiion wihin he sraegic decision-making process of he company. The goal of his paper is o summarize he curren developmen and basic principles of he Cusomer Lifeime Value model and is relaion o he pifalls of oday s markeing. Firs of all, he Cusomer Lifeime Value (CLV) concep is dened. Then we focus on how CLV is calculaed. Las bu no leas, we analyze is main elemens. 1. CLV as an answer o oday s business calls As was menioned in he previous ex, markeing has los is sraegic posiion wihin he rm s hierarchy parly because of he focus on operaional issues and parly because of iner-organizaion difculies. Anoher drawback of markeing aciviies is menioned as he unclear and no fully measurable oucomes of he markeing invesmens (Sheh & Sisodia, 2006). The answer o he call for markeing accounabiliy should no only be abou a cosmeic change in he markeing conrolling mechanisms. I will require a oal change in he way markeing is managed and on which oucomes i is focused. This change may be represened by he CLV. The main bene of his approach lies in he way markeing perceives and works wih cusomers and cusomer relaionships (Rus, Zeihaml, & Lemon, 2000). The basic principle of he CLV approach lies in redirecion of markeing focus from he mass produc wih one-way markeing communicaion back o he cusomer, cusomized bi-direcional communicaion and personalized offerings (Peppers & Rogers, 1997). Rus e al. (2004) add anoher crucial deniion ha describes he core values of he CLV. Based on his research, CLV shifs markeing from he ransacional cusomer business view o he long-erm relaionship markeing approach. Transacional markeing can be dened by shor-erm relaionships wih unspecied cusomers and main focus on produc managemen. In oher words, cusomers are viewed simply as consumers of companies push markeing communicaion mehods and mass producs. In conras o he ransacional markeing approach, relaionship markeing focuses on long-erm relaionships wih clearly specied and described cusomers. The produc offered o he cusomer in relaionship markeing does no need o be clearly personalized bu i should respond in is basis o he real cusomer s needs according o his or her curren siuaion. The CLV approach is nohing paricularly new. Traders from he beginning of he 20 h cenury can be menioned as an example of he cusomer business orienaion. These salesmen ried o build relaionships wih heir cusomers hrough personalized offerings and knowledge of cusomers needs and wans. There was no direc inenion behind hese aciviies. The salesmen were jus a par of he local communiy which helped hem o know he necessary informaion abou heir cusomers and o reac appropriaely. Today, business has become more complex and he company has o deal wih a much broader cusomer base. Till he 1990s, i was impossible o collec, manage and work wih cusomer daa regarding cusomer ransacion hisory, cusomer behavior, cusomer conac wih he company, ec. The daa is gained from differen sources wih differen focus and aim, which made i hard o inerconnec his informaion ino one useful oupu. However, nowadays, hanks o modern informaional echnologies, he differen sources can be inerlinked in order o connec he informaion abou cusomers. Thanks o differen bi-direcional communicaion mehods, cusomers can be effecively and personally addressed. From he iner-organizaional poin of view, he main change ha he CLV model brings ino markeing managemen is he view of he cusomer as a real business parner. CLV changes he cusomer from a passive consumer of he company s producs and markeing communicaion aciviies o a core and sraegic company asse (Blaberg & Deighon, 1996). This new view oally changes he way cusomers are reaed and undersood. 29

If he cusomer is viewed as a long-erm asse of he company, hen he aciviies relaed o his asse should be managed according o he general asse managemen pracice. Asses are aken as he basic pillar of each company s value, hrough which added value of he rm is creaed and furher ranslaed ino pro. The company s asses sand for one of he sraegic compeiive advanages of he rm (Besley & Brigham, 2004). Asse managemen requires respecive valuaion and conrolling mehods o manage he asse correcly and o ge a maximum from i. The basic premise of he sraegic asse is is long-erm duraion and herefore a long-erm proabiliy, which requires a long-erm managemen approach. This long-erm cusomer asse approach differeniaes he cusomer relaionship as i is viewed by he CLV from he shor-erm ransacional relaionship described above. The main goal of a ransacional relaionship is o maximize he revenue from each cusomer in he shor-erm, whereas he CLV model builds on he longerm sraegic ineracion beween he company and he cusomer as he company s long-erm asse. From he nancial poin of view, he possibiliy o quanify he impac of each cusomer and calculae reurn on each markeing invesmen is he main advanage of he CLV model. Companies can exacly calculae no only he curren, bu also he fuure conribuion of each cusomer and he value of he cusomer s longerm relaionship wih he company (Rus, Zeihaml, & Lemon, 2000). Managemen can hus apply nancially quaniable key performance indicaors for all markeing aciviies conduced wihin he rm and arge hem o he respecive cusomer base. I seems ha CLV may reply o mos of he curren markeing drawbacks menioned in he inroducion. CLV may se markeing back o he posiion of he main iner-organizaional funcion of he company where markeing has he responsibiliy and accounabiliy for he long-erm coninuous improvemen and proabiliy of cusomer relaionships. This responsibiliy consiss of he proable arge cusomer group choice, usage of an appropriae acquisiion sraegy and seing of a long-erm proable reenion sraegy (Blaberg, Gez, & Thomas, 2001). The aciviies relaed o hese sraegies go hrough he whole rm, from he fron ofce represened by he sales eam down o he back ofce deparmens (such as cusomer service or accouning). Markeing, as he main managing eniy, performs he coordinaing sraegic role in his process. On one side, i creaes he exernal sraegy in he direcion of he cusomer and on he oher side i moderaes cusomer relaionship imporance hrough all inernal eams. 2. CLV & CE Calculaion As was already menioned, similar o oher asses, each cusomer relaionship requires an invesmen which should produce respecive revenues. Therefore, he pros and invesmens will be spread over muliple accouning periods. The basic formula for each cusomer CLV calculaion is described as he sum of all fuure discouned pros coming from he cusomer relaionship, i.e. all revenues minus all coss relaed o he cusomer ineracion wih he rm (Bejou, Keiningham, & Aksoy, 2006). The fuure ineracions and relaed pros of he cusomer are inuenced by he reenion index, marked in he formula as r. This index shows he probabiliy of repeiive buying behavior in respecive ime period. The goal of reenion invesmens is o raise his probabiliy in order o mainain he relaionship wih he respecive cusomer for he seleced number of periods. Each cusomer s CLV is highly inuenced by he primal invesmen in he form of acquisiion coss, i.e. coss ha are invesed in he cusomer in order o inuence him/her for he iniial buying behavior as he sar of he relaionship. n p r R C r n CLV AC AC 1 1 1i 1i CLV = Cusomer Lifeime Value R = revenues by cusomer in period C = coss relaed o he revenues in period n = ime horizon for eximaing CLV (number of periods) i = discoun rae p = pro in period AC = acquisiion coss r = propabiliy of cusomer repea buying a period To calculae he oal value of all of company s cusomers, CE is used. This meric is described as he sum of CLVs of all of he company s curren and fuure cusomers (Rus, Zeihaml, & Lemon, 2000). CE CLV The CLV indicaor is primary used for inernal calculaions focused on he company s sraegy decisions regarding cusomer acquisiion and reenion invesmens. CE should be used as he indicaor of a company s overall performance and acs as one of he exernal indicaors of he company s condiion. 30

2.1 Individual Communicaion Approach Anoher model creaed by Kumar (2007) differeniaes beween and describes more deeply specic invesmens relaed o he cusomer and CLV creaion. The Average Gross Conribuion margin (GC) is described as he average revenue minus he average cos of goods sold in he respecive period. From his margin, he auhor subracs markeing coss for differen communicaion channels (relaed o he service of he accoun and relaed acquisiion coss. The oal CLV of i cusomer is calculaed as he sum of margins divided by he discoun facor and frequency of purchase for he seleced period, minus he discouned markeing coss for differen communicaion channels, minus he acquisiion coss. GC Ti n i m i,m,l CLV i Ai 1 (1 + ) l 1 (1 + r) 1 l 1ä 1 r frequency 2.2 Brand-Swiching Approach i MC As anoher form of CLV calculaion, we can menion he Brand-Swiching calculaion model primary focusing on he B2C business eld described by Rus e al. This model incorporaes he brand-swiching preferences of cusomers in a seleced argeed sample (Rus, Zeihaml, & Lemon, 2004). The CLV is calculaed based on informaion abou cusomer preferences wih regard o boh he company s and he compeiion s brands. The resul is he individual s brand swiching probabiliy marix based on he specic brand uiliy level of each cusomer. This mehod needs an exensive daabase abou boh he inernal and he compeiors cusomer base and heir purchases, which makes i hard o adap in real business decision-making processes. This shorage can be eliminaed by he Mone Carlo Simulaion Algorihm described by he same auhors. The algorihm adops he always-a-share mehodology predicing he fuure proabiliy of he relaionship wih he cusomer. The main idea of his mehodology is ha here is always an acive relaionship beween a prior cusomer and he company. When he cusomer reurns o he relaionship he renews he previous relaionship experience. Therefore, he calculaion is no relaed o he predicion of a cusomer s purchase paern and erminaion of he relaionship over a seleced period. The focus is pu on he oal pros and ne presen value of he pro in he seleced period as a whole. 2.3 Cusomer Migraion Model The Cusomer Migraion Model was rsly inroduced by Dwyer (Dwyer, 1997). Based on his model, cusomer buying behavior can be anicipaed based on hisorical purchase reenion daa obained from he inernal ransacion sysems of he company. The model involves he cusomer segmenaion approach based on demographic variables such as cusomer lifecycle, RFM Cusomer Value (Recency, Frequency and Moneary Value) or walle share. These segmens wih differen CLVs are hen assessed by probabiliy indexes of cusomers moving from one segmen o anoher. The respecive CLV is calculaed as he muliplicaion of such moving probabiliies and CLV of such a segmen. 2.4 Probabilisic model The probabilisic model builds he CLV calculaion direcly on he RFM Value Recency Value, Frequency Value, and Moneary Value from he hisorical ineracion wih he cusomer. The grea advanage of he model is is low informaion demand, especially in relaion o exernal informaion sources. All he informaion for he CLV calculaion can be gained from he company s inernal sysems on he oher hand, his is is bigges downside as he fuure CLV is calculaed only based on hisorical daa wih usage of mahemaic predicion mehods. The resuls of he probabilisic model are presened by he iso-value curves which show he relaion beween he Recency, Frequency and CLV (FADER, HARDIE, & LEE, 2005). 3. CLV heoreical background CLV orienaion on he long-erm valuable cusomer relaionship can be heoreically suppored by he main principles from microeconomics. The implicaion for he heoreical conrmaion of he CLV can be aken from he Produc Qualiy Game described in he Game Theory model by Rasmusen (2000). The players in his game are represened by he company and he cusomer. The game scenario can be described as an ineracion of he cusomer wih he company ha produces and offers a produc wih a xed price. The company chooses from wo sraegies, eiher o offer a high qualiy produc wih higher xed producion coss (lowering pro from each single ineracion) or o offer a low qualiy produc wih lower producion coss (increasing pro from each single ineracion). The cusomer has he sraegy o purchase he produc or no. He or she canno observe he produc qualiy before 31

deciding wheher o buy. The game is played repeiively in an indenie ime horizon wih a zero or low discoun rae. The possible payoffs of differen sraegies can be found below in he form of a payoff marix. Figure 1 Payoff marix Company s sraegies and payoffs Cusomer s sraegies and payoffs To purchase No o purchase HQ produc 5 / 5 0 / 0 LQ produc 10 / -5 0 / 0 markeing invesmens. Blaberg e al. (2001) differeniae beween hree caegories of markeing aciviies depending on he cusomer lifecycle wihin he rm Cusomer Acquisiion, Cusomer Reenion and Cusomer Add-on selling. The cusomer lifecycle wihin he rm can be divided ino four sages wih differen expeced sraegies (Blaberg, Gez, & Thomas, 2001). Figure 2 Cusomer Lifecycle Prospecs Early- Repea Core Cusomers Defecors Source: auhors To ge a beer undersanding abou he descripion of he qualiy variable we will use he deniion made by Wang (2004). He characerizes qualiy as he perceived level o which he produc mees he cusomer s expeced value (produc, procedural, personal, social and emoional value compared o perceived sacrice). The Nash equilibrium in his game is he combinaion of he LQ produc sraegy from he company s side and he No o purchase sraegy from he cusomer s side. This means ha he iniial purchase will no happen. However, he company will be ineresed in geing he cusomer o purchase. This fac will lead o he siuaion when he company will signal ha i has chosen he sraegy of a high qualiy produc in order o convince he cusomer o purchase he produc (which is a ypical markeing acquisiion echnique). In addiion, he company will be in he siuaion of moral hazard wheher o signal he HQ produc sraegy and in realiy play he LQ produc wih a higher pro from he single ransacion or wheher o really offer he HQ produc bu wih a lower pro in he respecive game. I is clear ha in repeiive games wih an indenie horizon, he only susainable sraegy from he company s side is he sraegy of HQ produc offer. This is he only way o susain he relaionship wih he cusomer and herefore long-erm business susainabiliy. The cusomer has no need o qui he relaionship and change he parner. In oher words, he goal of he company should be creaion of an open WIN-WIN relaionship where he cusomer has no reason o erminae his cooperaion. The company has o deliver he demanded produc or service in he expeced qualiy level in order o mainain he cusomer s repeiive buying behavior. 4. CLV main elemens and aciviies CLV cusomer focus changes he way markeing aciviies are managed and wha is he purpose of all CLV Source: Blaberg, Gez, and Thomas (2001) The prospec sage describes individuals wih poenial value for he company; he company has decided o inves an acquisiion invesmen ino hem in order o develop hem ino cusomers. Early repea buyers represen cusomers ha have made he rial purchase and compare he delivered qualiy wih heir expecaions. They decide wheher o coninue in he relaionship or wheher o defec. The hird group consiss of he core cusomers. The company ries o mainain he relaionship wih hese cusomers and raise heir CLV hrough add-on selling echniques. The las group defecors includes cusomers ha are deciding o or have already decided o end he relaionship wih he company. In some cases, he company can sill make seps o save hese cusomers if he CLV of hese cliens is worh i. 4.1 Cusomer Acquisiion TIME Cusomer acquisiion sands for he basic and primary par of he whole cusomer relaionship process. This phase inuences all he following sages, and i is described by many auhors as he mos invesmen inensive par of he relaionship. The process of acquisiion consiss of argeing (selecing he prospecive cusomer groups), generaing awareness and posiioning (communicaion of he offer owards he argeed prospecs), 32

building he pricing sraegy (i.e. wheher o apply an acquisiion or reenion pricing discriminaion sraegy) and managing he rial purchase (experience and saisfacion managemen). The acquisiion budge should no be considered a cos bu more as a sraegic invesmen. The primary goal of he company acquisiion projecs is o creae a new relaionship, no o sell one produc or service. The acquisiion invesmens should be made ill he CLV of he cusomer exceeds he acquisiion coss. 4.2 Cusomer Reenion and Saisfacion Trap According o Keiningham e al. (2006), 20% of he company s cusomers make from 150% o 300% of he company s oal pro, from 60% o 70% of he cusomers are on he breakeven (heir CLV equals zero) and from 10% o 20% of he cusomers lose from 50% o 200% of he company s oal pro. This nding implies he need for sraegic managemen of reenion processes. As was already menioned, he relaionship sars wih appropriae acquisiion. Reenion should ensure ha he expeced CLV would be brough o he company hrough sraegically buil relaionships. The main goal of he reenion aciviies is o ensure he repeiive buying of he acquired cusomers and o opimize he oal CE by managing he opimal reenion rae on he opimal cusomer base wih a posiive CLV index. According o Malhouse e al. (2008), reenion is he resul of he behavioral loyaly ino which aiudinal (brand) loyaly is ransposed. This model proves ha loyaly on is own is no direcly he key o reenion bu i mus be linked wih he purchasing behavior. Loyaly and reenion are many imes associaed and inerconneced wih he pursui of saisfacion (Rahman, 2013). This linkage creaes enormous coss, bu based on he ndings of many sudies brings low or even zero effec on he real reenion (Blaberg, Gez, & Thomas, 2001; Malhouse & Mulhern, 2008; Carnegiea, Wilcoxb, & Zhuc, 2008; Gounaris, Tzempelikos, & Chazipanagioou, 2007). I is because saisfacion, described as he posiive difference beween expecaions and delivered qualiy, is jus one elemen of loyaly and reenion. The oher crucial elemens ha inuence reenion are, according o Blaberg e al. (2001), cusomer perceived value (he qualiy divided by he price), produc uniqueness, ease of purchase, cusomer service and he ease o exi. All hese elemens have o be aken ino consideraion when a company is rying o increase he reenion rae. On he oher side, even hough saisfacion does no show a direc resul wih reenion rae, i fosers long-erm loyaly and decreases he defecion rae (Malhouse & Mulhern, 2008). 4.3 Add-on selling Add-on selling can be described as he direc increase of CLV hrough offering cusomers addiional ineracion opporuniies. These aciviies increase he overall cusomer revenue and proabiliy (Blaberg, Gez, & Thomas, 2001; Blaberg, Gez, & Thomas, 2001). Addon selling is no relaed jus o he cross selling, i is more focused on he long-erm managemen and shif in he bi-direcional relaionship. The add-on producs or services mus ino he overall relaionship wih he cusomer and should be he answer o he cusomer s direc wans and needs. Add-on selling is also a way o reain unproable cusomers hrough offering hem addiional producs in order o raise he overall revenue and subsequenly he cusomer CLV index. 4.4 Cusomer advocacy value Cusomer advocacy value is menioned in many heoreical sudies, bu here is sill no research model for quanifying he impac of his elemen on he CLV. I is clear ha cusomer advocacy (in many sources called word-of-mouh) has a growing imporance on he overall business resuls because of he growing srengh of social neworks, which enable sharing of he experience wih he produc or service (Karlíek, Tomek, & Kížek, 2010). Companies already seek he opinion leaders, inuencers, decision makers ec. hrough which hey ry o inuence cusomers. Nowadays, social neworks make from each cusomer an inuencer in a shor period of ime wih a poenially enormous response. Posiive advocacy can bring more cusomers han any oher acquisiion campaign wih minimum direc coss. Neverheless, negaive word-of-mouh can do more damage han ever before. All of he above-menioned saemens show ha cusomer advocacy should be aken seriously. The rs sep should be o focus on cusomer saisfacion hrough which posiive advocacy sars. 5. CLV limiaions Despie he above-menioned posiive asses of he CLV model, we should also menion some of he limiaions ha auhors connec wih his approach. Choo Meng Kong menions one of he key CLV downsides is ha here is no guaranee ha he cusomer will say loyal in his fuure decision making processes (Kong, 2006). As we have shown above, he reenion index in he CLV formula represens a crucial elemen of he CLV calculaion which deermines wheher he cusomer relaionship will be proable or no herefore his elemen of uncerainy makes he model hard o implemen easily 33

wihou any furher invesmens. In relaion o he previously saed downside, Koler e al. menion he need for large invesmen, which is conneced wih he creaion and mainenance of cusomer daabases in order o be able o correcly predic, inuence and manage he cusomer decisions (Koler & Keller, 2011). This includes no only he direc bu also indirec invesmen relaed o he implemenaion of a real cusomer oriened corporae culure wihin he company. From he model perspecive, i is necessary o look a he CLV as a dynamic model. In many sudies, CLV acs only as a form of cusomer evaluaion inpu ino he radiional ransacional markeing sraegies. The misuse of he CLV s dynamic elemen can cause inaccurae cusomer group selecion. The main aim of he CLV is o work wih and develop cusomers in order o increase heir lifeime value for he company (Carnegie, Wilcox, & Zhu, 2008). Therefore he saic repor abou he curren cusomers CLV may lead o a sraegy in order o maximize his value based on he CLV philosophy. 6. Conclusion and fuure research implicaions The curren massive growh of modern informaion echnologies and srengh of social neworks are leading o an increase of each cusomer s imporance. A cusomer, who was previously perceived as one of many, is now aken as a unique eniy ha requires specic and separae reamen. Each cusomer and each relaionship has is own value described by he CLV model. A company has o keep in mind he imporance of he value of is cusomers and properly manage he relaionship in order o ge he maximum from i. The aim of his paper was o summarize he curren developmen, basic principles of he CLV concep and main posiive oupus for oday s markeing managemen and overall business sraegy. I is sill necessary o keep in mind he basic mission of he CLV model ha manifess he need o undersand he real needs and wans of each separae cusomer in order o build a proable long-erm relaionship. The CLV approach is nohing paricularly new, bu i brings he markeing focus back o is roos, i.e. back o he cusomer. The oday s environmen, companies are already focused, on some level, on he cusomer and his/her conribuion o he overall proabiliy. Bu wih no doub, here are major differences beween he deph and ime horizons of his focus. To be able o creae a model of CLV applicaion, here is a need o undersand he differen levels of cusomer orienaion. This fuure research should describe paricular differences in cusomer orienaion in respec o he ime horizon, inernal managemen sysem, available informaion sysems and heir inerconnecion, accouning mehods ec. hrough differen business secors and company sizes. Moreover, here is an eviden need for creaion of a heoreical model calculaing he real impac of he Cusomer Advocacy Value on he overall CLV. The basic quesion ha should be answered is wheher o coun he Advocacy Value o he pos Acquisiion Value of fuure cusomers or as a par of he respecive CLV. The research should be done boh on he company s as well as on an individual cusomer s level o be able o fully undersand he consequences beween he company s relaionship managemen effors and he elemens ha inuence he cusomer s posiive advocacy. References Carnegiea, B. S., Wilcoxb, R., Zhuc, T. (2008). Ignoring Your Bes Cusomer? Journal of Relaionship Markeing, 6 (3-4): 87-116. Cassidy, F., Freeling, A., & Kiewell, D. (2005). A credibiliy gap for markeers. McKinsey Quarerly, 2: 9-10. Aksoy, L., Keiningham, T., & Bejou, D. (2006). Approaches o he Measuremen and Managemen of Cusomer Value. Journal of Relaionship Markeing, 5 (2-3): 37-54. Bejou, D., Keiningham, T. L., & Aksoy, L. (2006). Cusomer Lifeime Value: Reshaping he Way We Manage o Maximize Pros. Journal of Relaionship Markeing, 5 (2-3): 87-110. Besley, S., & Brigham, E. F. (2004). Essenial of Managerial Finance. Souh Weser College. Blaberg, R. C., Deighon, J. (1996). Manage Markeing hrough he Cusomer Equiy. Harvard Business Review, 74 (4): 136-144. Blaberg, R. C., Gez, G., Thomas, J. S. (2001). Cusomer Equiy, Building and Managing Relaionships as Valuable Asses. Boson: Harvard Business School Press. Brown, S. (1995). Life begins a 40?: Furher houghs on markeing s mid-life crisis. Markeing Inelligence & Planning, 13(1): 4-17. Davies, M. A., Ardley, B. (2012). Denial a he op able: Saus aribuions and implicaions for markeing. Journal of Sraegic Markeing, 20 (2): 113-126. Dewsnap, B., Jobber, D. (2000). The sales-markeing inerface in consumer packaged-goods companies: a concepual framework. Journal of Personal Selling & Sales Managemen, 20 (2), 109-119. Economis Ineligence Uni. (2006, Sepember). The fuure of markeing: From monologue o dialogue. USA: The Economis. 34

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