Case Study

Customer lifetime valuation: Water filters – a brief exercise

2 pages
December 2013
Reference: IMD-5-0785

The protagonist of this case, Andreas, is marketing manager at Coral GmbH, based in Wasserstein, Germany. The company is an international manufacturer of residential water treatment systems to improve the quality and taste of tap water. He has been approached by a direct marketing firm offering its services in developing and implementing a sales promotion to help boost Table Water Filter’s end-of-year sales before Christmas. The suggestion is to launch an in-store promotional campaign at a certain price quote. Andreas is interested but now has to evaluate how many new customers the campaign must to generate in order to break-even and/or become financially interesting.

Learning Objective

Understand the key role of customer equity and customer lifetime value in relationship marketing. Calculate total customer lifetime value as a basis for decision-making in marketing.

Keywords
Customer, Equity, Value, Marketing Audit, Marketing Analysis, Campaign, Customer Lifetime Values, Sales Promotion, Evaluation
Settings
Europe, Germany
Type
Generalized Experience
Copyright
© 2013
Available Languages
English
Related material
Teaching note
Case clearing houses
IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Looking for something specific?
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics