CUSTOMER VALUE NETWORK ANALYSIS FOR IMPROVEMENT OF CUSTOMER LIFE-TIME VALUE COMPUTATION

Abstract

ABSTRACT The constant changes in the world have exposed companies to a situation of tough competition. This situation, especially in e-commerce, complicates the decision-making process about target customers and the recommendation of products to them. On the one hand, understanding and measuring the customer lifetime value (CLV) is a critical factor for long-term success. On the other hand, the value network is a new concept that considers both tangible and intangible complex dynamic value exchanges between two or more enterprises, customers, suppliers, etc. In this paper we introduce a new definition of value networks that has focused on customer relationship management (CRM) concepts called business customers' value network. Then, we suggest the value network analysis (VNA) approach as a powerful tool for modeling and analyzing tangible and intangible relationships between a company and its business customers, and propose VNA to improve networking potential of CLV. This study provides a conceptual framework for mapping a newly proposed value network consisting of three schemas (star, community and compound schemas) with an illustrated example. Development of a new networked measure of CLV called network customer lifetime value (NCLV) is our future aim. Keywords: Customer lifetime value (CLV), Value network analysis (VNA), Customer relationship management (CRM), Business-to-business, Network customer lifetime value (NCLV).