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Size and Share of Customer Wallet

Journal of Marketing, Vol. 71 (April 2007), 94-113

22 Pages Posted: 12 Feb 2014  

Rex Yuxing Du

University of Houston - C.T. Bauer College of Business

Wagner A. Kamakura

Rice University

Carl F. Mela

Duke University - Fuqua School of Business

Date Written: April 1, 2007

Abstract

Many companies collect substantial information about their interactions with their customers.Yet information about their customers’ transactions with competing firms is often sparse or nonexistent. As a result, firms are often compelled to manage customer relationships from an inward view of their customers. However, the empirical analysis in this study indicates that (1) the volume of customers’ transactions within a firm has little correlation with the volume of their transactions with the firm’s competitors and (2) a small percentage of customers account for a large portion of all the external transactions, suggesting the considerable potential to increase sales if these customers can be correctly identified and incentivized to switch. Thus, the authors argue for a more outward view in customer relationship management and develop a list augmentation-based approach to augment firms’ internal records with insights into their customers’ relationships with competing firms, including the size of each customer’s wallet and the firm’s share of it.

Suggested Citation

Du, Rex Yuxing and Kamakura, Wagner A. and Mela, Carl F., Size and Share of Customer Wallet (April 1, 2007). Journal of Marketing, Vol. 71 (April 2007), 94-113. Available at SSRN: https://ssrn.com/abstract=2392649

Rex Yuxing Du

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Wagner A. Kamakura (Contact Author)

Rice University ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States
(713) 348-6307 (Phone)

Carl F. Mela

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7767 (Phone)

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