Customer Life Cycle Value Of The Theoretical And Empirical Research

If we turned the clock back 20 years, this paper might be nothing. Because in those years characterized by insufficient supply when the whole market in China was just like a virgin land waiting for exploration, a great initiative demand from the new customers was enough to stick to the suppliers'rib. Even in the relatively competitive textile industry, the acquisition cost of new customers is far more moderate. The suppliers could pay more attention to new markets and market share, rather than spend in customer retention. Then, could time flow backwards? Of course not. So, enterprises are forced to face up to the extremely competitive market today, and make effort to optimize customer management and maximize customer value.Customer value, as a source and a key measurement of the corporate value, comes mainly from customer acquisition and customer retention under the angle of CRM. What we most concern in the course of customer value maximization is who should be retained and how to hold them. Along the main line of customer retention, this paper perfects the conceptual framework of Customer Lifetime Value (CLV), which is explained with two factors, Customer Demand Potential and Customer Loyalty. Furthermore, a Customer Potential Value (CPV) model is built based on panel data. After the theoretical study, this paper analyzes a real-world case of customer potential value assessment with the use of renewal data from the call center of a certain securities company, and some marketing strategy suggestions are derived from the data mining results. It is proved that both the renewal rate and customer value are upgraded in some degree with the aid of appropriate customer retention strategy.The"Expectation"in the last part of the paper addresses a further view of"optimization"and"constraint"that even if"constraint"is not more important than"optimization", it should have the same importance and be treated equally without discrimination.