What to do with Unprofitable Customers? Customer Lifetime Value, Customer Metrics of Adverse Behavior, and Feasible Strategies for Managing Unprofitable Customers

Inhaltsverzeichnis (Table of Contents)

• Introduction
• Customer lifetime value and its measurement models.
• Different perspectives on CLV
• Measurements models of CLV in contractual context.
• Basic structural model
• Recency, frequency and monetary model.
• Measurement models of CLV in noncontractual context
• Pareto/NBD model and its variations
• Markov chain model
• Customer metrics of adverse behavior.
• Demand for customer service.
• Partial churn.
• Deal-proneness.
• Share of wallet.
• Analysis of feasible strategies for managing unprofitable customers and their linkage to customer metrics and CLV
• Retention strategies.
• Explanatory framework for retaining unprofitable customers.
• Abandonment strategies.
• Explanatory framework for abandoning unprofitable customer

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This bachelor thesis aims to analyze the relationship between customer lifetime value (CLV) and customer metrics of adverse behavior, specifically focusing on strategies for managing unprofitable customers. It seeks to identify the key factors that contribute to customer unprofitability and explore feasible solutions for addressing this issue.

• Customer lifetime value (CLV) and its measurement models.
• Customer metrics of adverse behavior (e.g., demand for customer service, partial churn, deal-proneness, share of wallet).
• Strategies for managing unprofitable customers (e.g., retention and abandonment strategies).
• Linkage between customer metrics, CLV, and strategies for managing unprofitable customers.
• Impact of different strategies on the firm's profitability and clientele.

Zusammenfassung der Kapitel (Chapter Summaries)

The thesis begins by defining customer lifetime value and exploring different measurement models, including both contractual and noncontractual contexts. The second chapter delves into customer metrics of adverse behavior, such as demand for customer service, partial churn, deal-proneness, and share of wallet. The third chapter analyzes feasible strategies for managing unprofitable customers, including both retention and abandonment approaches. It also examines the relationship between customer metrics, CLV, and the effectiveness of these strategies.

Schlüsselwörter (Keywords)

Customer lifetime value (CLV), customer metrics, adverse behavior, unprofitable customers, retention strategies, abandonment strategies, marketing strategy, customer relationship management (CRM).