January 2005
Beginner to intermediate
224 pages
4h 32m
English
book
Managing Customers as Investments The Strategic Value of Customers in the Long Run
by Sunil Gupta, Donald R. Lehmann
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Appendix C. VALUE OF CUSTOMER BASE
In this Appendix we provide mathematical details for assessing firm value based on the value of customers.
VALUE OF A FIRM'S CUSTOMER BASE
Conceptually, the value of a firm's customer base is the sum of the lifetime value of its current and future customers. We first build a model for the lifetime value of a cohort of customers, then aggregate this lifetime value across current and future cohorts, and finally construct models to forecast the key inputs to this model (e.g., the number of customers in future cohorts).
We start with a simple scenario where a customer generates margin mt for each period t, the discount rate is i and retention rate is 100%. In this case, the lifetime value of this customer is simply ...
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O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.