Customer Value Modelling: Model synthesis and extension proposals

Mihai Calciu, Associate professor, Université Lille 1, calciu@iae.univ-lille1.fr ()Francis Salerno, Professor, Université Lille 1, francis.salerno@iae.univ-lille1.fr ()

The Customer Lifetime Value is a key concept in relationship marketing. This article develops, synthesizes and organizes formulas for computing this Lifetime Value in a progressive manner and continues a research direction started some years ago. Calculations are organized using a double taxonomy: the one of customer relationship behaviour models - retention and migration models - and the one of algebraic and matrix computing methods. The suggested formulas allow for explicit representation of recency censored customer migration processes, flexible integration of desynchronized financial flows and extend customer value optimisation procedures from the retention to the migration model.