Managing Customer Lifetime Value in Client Communities

The present paper is intended to cover major issues pertaining to the domain of customer lifetime value (CLV) measurement within the borders of client communities. The general purpose of the research is to investigate interconnection between implementation of a client community in a corporation and higher level of CLV. It has already been discussed in the literature that traditional marketing metrics such as market share or brand awareness are not sufficient to analyze profitability of the marketing expenditures (Srivastava et al., 1998; Rust et al., 2004), but “assessment of CLV makes it possible to link long-term financial returns explicitly to marketing actions” (Chang, Chang & Li, 2012). The methods utilized in the study are powerful tools for collecting necessary data represented by both qualitative and quantitative research methods. Qualitative approach is actualized through content analysis of sixteen case studies from the Jive Software website, while quantitative side includes questionnaire consisting of fourteen questions with nominal, ordinal (Likert), and interval scales. Sample for the second part of the research includes 107 randomly chosen respondents. As a result of content analysis, eight categories of factors influenced by the client community implementation were distinguished in order to further develop questionnaire for a survey. After gathering necessary information from a survey, the database was analyzed in SPSS software. It was proved that companies which have client communities implemented in their customer relationship management system (CRM), on average, benefit from higher CLV level as opposed to companies that have not established such community. The current paper may appear to be of peculiar significance to project and middle managers as well as to contribute to the development of theoretical body of literature concerning CLV by providing profound analysis of this concept in terms of client communities.