The Wheel of Fortune Strategies to Maximize CLV:

Linking Investments in Branding to Customer Profitability:

A typical dilemma faced by any corporate board is whether to invest in building brands or to invest in building the customer base. Which of the above routes ensure maximum profitability? The answer is probably to invest in both. Also, it would be difficult to estimate how investing in brand-building contributes towards attaining higher profitability. A key to address these issues is to establish a link between brand value and CLV to manage individual customer brand value. This results in maximizing the customer lifetime value. This strategy explores the link between Individual Brand Value (IBV) and Customer Lifetime Value (CLV) and, offers insights towards bridging the gap between IBV and CLV.

Brand equity and customer equity have been traditionally viewed as two separate marketing assets. However, building a brand through traditional approaches does not necessarily achieve growth in the customer lifetime value. Measurements on components of an individual’s brand value are suggested so that a firm can identify how its customers value the brand. This framework enables a firm to optimize a customer’s lifetime value, thereby allowing simultaneous growth in brand equity and customer equity. Based on these results, the firm can redesign its communication strategies to cater to the needs of such customers. In one of the implementations, after the brand value was linked to CLV, the scores of the components of the brand value were improved to yield a higher CLV.