Category: Marketing Metrics
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Valuing Customers As Investments
I think of Sunil Gupta and Don Lehmann’s 2005 book, Managing Customers As Investments, as the third of the valuing customers books. (After Rust and colleagues Driving Customer Equity and Blattberg and colleagues, Customer Equity). It was written a few years after the others and I think that probably helps it read more cleanly. It…
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Treating Customers As Assets
There were several papers, and a book, that followed but Sunil Gupta and Donald Lehmann had a really interesting 2003 piece in the Journal of Interactive Marketing. This was about treating customers as assets. Much of the best ideas in this field are already on show there in this early paper. Marketing And Firm Value…
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Belief In Mythical Numbers
The strategy setting process in any organization is always an interesting one. Given its centrality to the idea of managing an organization you might think people had the process down. You would be wrong. Vikas Mittal and Shridhari Sridhar look at the strategy setting process through extensive interviews and surveys. It isn’t always a pretty…
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A Customer Equity Balance Sheet
The book, Customer Equity, is a bit of a classic in the marketing field. It is an early attempt to refocus companies from products to customers, specifically through measurement of the value of the customer base. The authors introduce a lot of interesting new ideas. They have many admirably big swings and, to be honest,…
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Valuing Firms Through Their Customers
The basic idea of valuing a firm through its customers is an excellent one. There was a collection of works looking to do this early in the millennium. This was partly motivated by the challenges of the dot-com boom. In this boom firms had high valuations but low profit (or more likely losses). The valuation…
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What Drives Customer Equity?
Around the turn of the millennium, there was a lot of interest in the idea of customers as financially relevant. Thus work started to concentrate on the idea of customer equity. Customer equity was sometimes equated with the idea of customers as assets. This is an important aim (even though I have some measurement quibbles).…
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A Unified Theory Of Marketing
One of the challenges with marketing is that there are so many bits that don’t fit together. As such let me put on record that I appreciate the potential for customers to be put at the center of all the marketing approaches. CLV, the value of a customer to the firm, has potential for a…
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Are You Tyrannized By Metrics?
If you are tyrannized by metrics in this way I have just the book for you. Headline: “Tenured Professor Tyrannized By Metrics” Jerry Muller has a popular book — The Tyranny of Metrics. I have to say it is pretty bad. The problem is that it is a weak attempt to capitalize on concerns, some…
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Adjusting For Unrecorded Intangibles Is Hard
I have previously written about the good, and not so good, parts of Alexander Edeling’s, Shuba Srinivasan’s, and Dominique M. Hanssens’ 2020 review paper on the marketing finance interface, see here. Here I will comment on a specific assertion they make that strikes me as misleading. It is important to highlight this as I fear…
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Total Q Measures Investment Opportunities Not Firm Value
Papers in finance can sometimes get a hefty citation count boost when they get picked up in marketing. Peters and Taylor‘s 2017 paper on Total q is a nice paper. They make the very reasonable assertion that their Total q measures investment opportunities better than current Tobin’s q approximations. While I’m not a finance person…
