Customer Lifetime Value and the Austrian School Tradition

30 Pages Posted: 11 Apr 2015

See all articles by Gerasimos Lianos

Gerasimos Lianos

Southwestern University of Finance and Economics

Igor Sloev

National Research University Higher School of Economics

Date Written: April 8, 2015

Abstract

We examine the modern approach to customers as assets in its connection to the tradition of the Austrian Economic Theory. We revisit the concept of Customer Lifetime Value within a conceptual framework similar to a Misesian Evenly Rotating Economy. We argue that individual entrepreneurial action inside the market process plays a crucial role in determining the characteristics of customer assets. In our model of an Evenly Rotating Economy we show by means of a numerical example that a passive entrepreneurial attitude and a mechanistic application of the Customer Lifetime Value approach may result in destruction of Value of the Firm.

Keywords: Customer Lifetime Value, Customer Equity, Mises, Evenly Rotating Economy, Market Process

JEL Classification: B25, B31, B53, M31, M37

Suggested Citation

Lianos, Gerasimos and Sloev, Igor, Customer Lifetime Value and the Austrian School Tradition (April 8, 2015). Available at SSRN: https://ssrn.com/abstract=2592073 or http://dx.doi.org/10.2139/ssrn.2592073

Gerasimos Lianos (Contact Author)

Southwestern University of Finance and Economics ( email )

Chengdu, 610074
China

Igor Sloev

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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