Open AccessBalancing Market Share Growth and Customer Profitability: Budget Allocation for Customer Acquisition and Retention
Author(s) -
HsiuYuan Tsao,
Lucy Matthews,
Victoria L. Crittenden
Publication year - 2012
Publication title -
organizations and markets in emerging economies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.195
H-Index - 4
eISSN - 2345-0037
pISSN - 2029-4581
DOI - 10.15388/omee.2012.3.2.14267
Subject(s) - customer equity , customer profitability , customer retention , customer lifetime value , business , profitability index , loyalty business model , customer advocacy , marketing , customer to customer , equity (law) , loyalty , customer delight , finance , service quality , political science , law , service (business)
This study adds to the knowledge of budget allocation for customer acquisition and retention spending in an inertia segment. The results indicate that when retention spending surpassed the optimal budget allocation, increased spending did not grow the expected value of customer equity. Since the inertia segment is comprised of loyal customers, an examination of brand equity and its role in customer loyalty and its influence on customer equity are discussed.