Marketing

Document Type

Article

Publication Date

Spring 2010

Publication Title

Journal of Marketing Theory and Practice

Abstract

It is traditionally accepted that customer loyalty is critical for a firm’s profitability. Recent research,however, questions the effects of customer loyalty on profitability. In light of this controversy, we examine the financial effects of customer loyalty using the framework of customer lifetime value (CLV). Our analysis reveals that in the area of consumer packaged goods, customer loyalty is positively associated with customer revenue and customer retention, both of which drive CLV. Thus, customer loyalty is indeed a predictor of long-term customer profitability to a firm. For marketers, customer loyalty continues to be a legitimate end goal to pursue in marketing management.

Original Citation

Zhang, J. Q., Dixit, A. A., & Friedmann, R. R. (2010). Customer Loyalty and Lifetime Value: An Empirical Investigation of Consumer Packaged Goods. Journal Of Marketing Theory And Practice, 18(2), 127-140.

DOI

10.2753/MTP1069-6679180202

Version

Postprint

Volume

18

Issue

2

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