Marketing Analysis Toolkit: Customer Lifetime Value Analysis

Posted: 19 Aug 2010

See all articles by Thomas J. Steenburgh

Thomas J. Steenburgh

University of Virginia - Darden Graduate School of Business

Jill Avery

Harvard Business School

Date Written: July 27, 2010

Abstract

Customers are increasingly being viewed as assets that bring value to the firm. Customer lifetime value is a metric which allows managers to understand the overall value of their customer base and relate it to three customer strategies firms employ: asset acquisition - attracting new customers to the firm, asset maximization - maximizing the value the firm extracts from each customer, and asset retention - retaining existing customers for the long term. The note gives students a foundation for analyzing marketing cases, as well as providing an analytical structure and process for completing a marketing plan. The note is accompanied by a free Excel worksheet which contains sample problems, prebuilt Excel models to calculate customer lifetime value, and charts and graphs which help visualize the results.

Suggested Citation

Steenburgh, Thomas J. and Avery, Jill J., Marketing Analysis Toolkit: Customer Lifetime Value Analysis (July 27, 2010). HBS Case No. 511-029; Harvard Business School Marketing Unit. Available at SSRN: https://ssrn.com/abstract=1661875

Thomas J. Steenburgh (Contact Author)

University of Virginia - Darden Graduate School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Jill J. Avery

Harvard Business School ( email )

Cambridge, MA
United States
6174958084 (Phone)

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