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Case Study

Customer lifetime valuation: Water filters – a brief exercise

By Wolfgang Ulaga and Anna Eckardt

2 pages

December 2013

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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, Marketing, Campaign, Customer Lifetime Values, Sales Promotion, Evaluation

Settings

Europe, Germany

Type

Generalized Experience

Available Languages

English

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