Enterprise Customer Lifetime Value Model And Applied Research

As a new management mode, Customer relationship management (CRM) caters for the change and development of market in the new economic environment. Its theory and method can direct enterprises to adjust their customer relationship well, so more and more enterprises pay much attention to it. Customer lifetime value (CLV) is the key concept within CRM and it has become a main study area of CRM. Enterprises can identify different rank of customers and allocate their resources to different customers properly through evaluating customer lifetime value, and then gain more profit from valuable customers so as to develop their competence in competition. So how to maintain the long-term relationship between enterprises and customers efficiently and maximize customer lifetime value are the problems urgently waiting to be solved for enterprises.For the reasons above mentioned, based on the present study status on CLV, from the perspective of enterprises, this paper discusses the evolvement and difficulties of CLV study in order to facilitate the study on customer relationship management strategies and the development of decision support system in CRM software. At first, the paper illustrates the theory framework correlated with CLV, including CRM theory, customer lifecycle theory and customer value theory. Then based on these theories, the paper puts forward the improved means to define the main parameters in CLV model, that is, customer value parameter, dynamic customer retention rate and customer lifecycle time factor. And then an expanded CLV model is presented. Afterwards, several instances correlated with parameters of CLV model are showed. At last, the paper discusses the applications of CLV theory and model in customer relationship management and brings forward some relevant strategies to direct the CRM practice of Chinese enterprises.