The DOI matches its Crossref record; 7 of the 7 references it cites were found in a registry or an index.
Expanding the Role of Marketing: From Customer Equity to Market Capitalization
Abstract
Can a marketer drive the stock price of the firm? Yes, it should be possible. Toward this endeavor, the authors develop a framework to link customer equity (CE) (as determined by the customer lifetime value metric) to market capitalization (MC) (as determined by the stock price of the firm). The authors test the framework in an empirical field experiment with two Fortune 1000 firms in the business-to-business and business-to-consumer contexts, respectively. The findings show that (1) a CE-based framework can reliably predict the MC of the firm and (2) marketing strategies directed at increasing the CE not only increase the stock price of the firm but also beat market expectations. Furthermore, the results indicate that the relationship between CE and MC is moderated by risk factors in the form of volatility and vulnerability of cash flows from customers. By accounting for these factors, the authors improve the association between CE and MC. The findings broaden the scope and role of marketing while reinforcing the importance of the marketer to any organization.
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Cites
Prospect Theory: An Analysis of Decision under Risk
Kahneman, D., & Tversky, A. (1979) · Econometrica · doi:10.2307/1914185 · Cited by 48,524
Efficient capital markets: A review of theory and empirical work
Fama, E. F. (1970) · The Journal of Finance · doi:10.2307/2325486 · Cited by 13,635
Return on Marketing: Using Customer Equity to Focus Marketing Strategy
Rust, R. T., Lemon, K. N., & Zeithaml, V. A. (2004) · Journal of Marketing · doi:10.1509/jmkg.68.1.109.24030 · Cited by 2,151
A Customer Lifetime Value Framework for Customer Selection and Resource Allocation Strategy
Venkatesan, R., & Kumar, V. (2004) · Journal of Marketing · doi:10.1509/jmkg.68.4.106.42728 · Cited by 948
Self-citationGupta, S., Lehmann, D. R., & Stuart, J. A. (2004) · Journal of Marketing Research · doi:10.1509/jmkr.41.1.7.25084 · Cited by 849
The Influence of Loyalty Programs and Short-Term Promotions on Customer Retention
Lewis, M. (2004) · Journal of Marketing Research · doi:10.1509/jmkr.41.3.281.35986 · Cited by 534
CRM in Data-Rich Multichannel Retailing Environments: A Review and Future Research Directions
Verhoef, P. C., Venkatesan, R., McAlister, L., Malthouse, E. C., Krafft, M., & Ganesan, S. (2010) · Journal of Interactive Marketing · doi:10.1016/j.intmar.2010.02.009 · Cited by 160
Cited by
Understanding customer experience throughout the customer journey
Lemon, K. N., & Verhoef, P. C. (2016) · Journal of Marketing · doi:10.1509/jm.15.0420 · Cited by 5,765
Creating Enduring Customer Value
Kumar, V., & Reinartz, W. (2016) · Journal of Marketing · doi:10.1509/jm.15.0414 · Cited by 829
Self-citationThe Service Revolution and the Transformation of Marketing Science
Rust, R. T., & Huang, M.-H. (2014) · Marketing Science · doi:10.1287/mksc.2013.0836 · Cited by 578
Referral Programs and Customer Value
Schmitt, P., Skiera, B., & Van den Bulte, C. (2011) · Journal of Marketing · doi:10.1509/jm.75.1.46 · Cited by 455
“3 This way, we do not need to predict margins and retention rates beyond four years after the end of the data window, and the resulting CLV values are unlikely to be overly affected by forecasting error (Kumar and Shah (2009). 4 We base the discount rate on the CAPM.”
BackgroundCRM in Data-Rich Multichannel Retailing Environments: A Review and Future Research Directions
Verhoef, P. C., Venkatesan, R., McAlister, L., Malthouse, E. C., Krafft, M., & Ganesan, S. (2010) · Journal of Interactive Marketing · doi:10.1016/j.intmar.2010.02.009 · Cited by 160
Metadata
- Authors
- Kumar, V., & Shah, D.
- Venue
- Journal of Marketing
- Publisher
- SAGE Publications
- Published
- 2009-11
- Volume
- 73
- Issue
- 6
- Pages
- 119-136
- ISSN
- 0022-2429 (ISSN-L)
- 1547-7185
- OpenAlex
- W1986719200
- Cited by
- 289
- References
- 7
- FWCI
- 52.99
- Type
- journal article
- Language
- en
- Open access
- closed
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