Can a marketer drive the stock price of the firm? Yes, it should be possible. Toward this endeavor, the authors develop a framework to link customer equity (CE) (as determined by the customer lifetime value metric) to market capitalization (MC) (as determined by the stock price of the firm). The authors test the framework in an empirical field experiment with two Fortune 1000 firms in the business-to-business and business-to-consumer contexts, respectively. The findings show that (1) a CE-based framework can reliably predict the MC of the firm and (2) marketing strategies directed at increasing the CE not only increase the stock price of the firm but also beat market expectations. Furthermore, the results indicate that the relationship between CE and MC is moderated by risk factors in the form of volatility and vulnerability of cash flows from customers. By accounting for these factors, the authors improve the association between CE and MC. The findings broaden the scope and role of marketing while reinforcing the importance of the marketer to any organization.

Many firms have experienced greater success through implementing relationship marketing strategies. This is achieved by gaining knowledge about their own customers through database marketing and about the general marketplace through marketing research. Over time, this has led firms to adopt a general framework which we call the conventional path to profitability. This conventional framework suggests that new product innovation leads to acquisition, acquisition combined with a rich experience leads to satisfaction, satisfaction leads to loyalty and customer retention, and loyalty/retention leads to profitability. However, we show that some of the links in the framework are weak based on both academic research and marketplace realities. Consequently, we reverse the logic of the conventional path to profitability. We introduce a new approach that starts the customer relationship management strategy with customer profitability and the notion that different customers should be rewarded and satisfied differently. In addition, we outline a strategy that relationship marketing firms can implement, leading to higher levels of customer profitability and offer directions for future research.

Cross-selling is a popular marketing tool for selling additional products to existing customers to boost revenue and profits. However, our findings show that not all profitable customers necessarily buy more products, and not all customers who buy more products are necessarily profitable. Consequently, firms need to exercise caution while cross-selling to customers. Furthermore, cross-selling decisions should be evaluated vis-a-vis up-selling and notselling decisions as well. The framework proposed here can help managers make optimal selling decisions for long-term profitability.

This study examines how customer lifetime value (CLV) can be computed at individual customer level in a retail setting to maximize profitability. The study finds that maximum positive impact to CLV occurs when the customer cross-purchases, shows multi-channel shopping behavior, stays longer with the firm, buys specific product categories and purchases more frequently with the firm. Interestingly, the CLV follows an inverted U relationship with increase in return of prior purchases. Other interesting findings include a surprisingly low correlation between customer loyalty and future profitability and low correlation between stores' historic revenues and future profitability. Several implications are suggested for retailers to manage and maximize customer profitability as well as store profitability.

The concept of customer loyalty is conspicuous by its ubiquity. Therefore, there is no surprise that is it one of the most widely studies areas by researchers and one of the most widely implemented marketing initiatives by practitioners. This article draws upon past research to review important findings related to customer behavior and attitude in the context of customer loyalty. Further, research related to linking loyalty to profitability and forward looking metric such as the customer lifetime value is reviewed to propose a conceptual framework for building and sustaining loyalty and profitability simultaneously at individual customer level. A two-tiered rewards structure is presented as a means for marketers to operationalize the framework. The conceptual framework hopes to serve as a platform to understand the evolving dominant logic of loyalty programs for building and sustaining loyalty in the twenty first century as well as induce further research in that direction.

How many times have you ignored a banner ad or closed a pop-up window with a vengeance? For most Web users, the answer is "too many." The genesis of this problem lies in a poor marketing strategy that marketers adopt when advertising online. This article describes a framework for developing an effective online advertising strategy, followed by information on how to track the performance of online advertisements.