What is it about?
Based on linking the customer lifetime value and the shareholder value approaches this paper develops a marketing‐based method for corporate valuation. The presented method allows the estimation of corporate value based on customer‐related cash flows and traditional financial metrics. The paper introduces typical cases, in which the use of a customer‐based valuation is beneficial.
Why is it important?
A customer‐based valuation approach can guide marketing investments to avoid misallocation of resources. The paper demonstrates the usefulness of the approach for obtaining a realistic indicator of firm value and provides evidence for the superiority of a customer‐based approach over traditional financial methods.
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This page is a summary of: Customer‐based corporate valuation, Management Decision, March 2005, Emerald, DOI: 10.1108/00251740510589733.
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