Customer lifetime value analysis

Firms are increasingly adopting a customer-centric approach to marketing, and in this context, customer lifetime value (CLV) becomes critical. This dissertation investigates some im portant issues arising in CLV analysis. It is divided into three main parts with each investigating specific issues. The first part develops a continuous tim e markov chain based framework that allows a more general method for estim ating the total value of a firm’s present and future customers (Integrated Customer Equity (ICE)). The framework is applied to link marketing actions to customer equity, derive useful insights into customer relationship management, use customer lifetime as a basis for m arket segmentation, and propose a way to use ICE to measure the value of a firm.