Customer lifetime value analysis at Comtel

This case was developed in collaboration with Van Gool J. and Kemseke P. and is available at ECCH with reference 110-059-1.

Previous research shows that cooperation between marketing and sales departments on the one hand and finance and accounting departments on the other hand is not always satisfactory. More recent developments in management accounting however propose models and methods that are very useful for marketing and sales professionals.

In this case study we describe a customer lifetime model that is used by a telecom company to define its marketing strategy. More specifically the Telecom company has to allocate a marketing budget to attract new customers from the competitor, to win back customers or to upsell customers. It has different potential marketing campaigns to target specific customer segments.

In the first part of the case study a model is used to calculate the customer lifetime value of the different customer segments. The net present value of the attract, win back and upsell strategies are analysed in detail. In the second part of the case study the return on investment of the different marketing campaigns is determined to help the company with the allocation of the marketing budget. This approach is a clear illustration of the potential cooperation between accounting and marketing.

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Equis Association of MBAs AACSB Financial Times Economist Intelligence Unit