International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss


A Study on Customer Lifetime Value Method for Prospecting Lifetime Value of ‘Free Customer’: A Case of Retailer Business in Seberang Perai, Pulau Pinang, Malaysia
Abdul Manaf Bohari, Professor Dr. Ruslan Rainis, Dr. Malliga Marimuthu

The current world wide economy situation has impacts on many aspect of hypermarket profitability includes lifetime value of their ‘free customer’. Although the hypermarket have putting hard efforts on strengthening the customer relationship management to making more financially accountable, however most of them still have problem in sustaining their lifetime value of ‘free customer’. Theoretically, customer lifetime value (CLV) is a model for measure contribution of customer to the business, as long as their doing of his/her transaction with the business. In practice, there are different models may be used for estimates CLV where potentially to create different impacts on future prospects of the business. Most of CLV model are modelled base on database customer, as opposite of less attention on ‘free customer’. Critically, this segment of customer is non database customer, free from assessed, and their particular has no available to any hypermarket database. As implication, most of CLV model has risky where there are disobey the assessed of free customer profitability. The objective of paper is to investigate the different method of CLV model used by the supermarket and hypermarkets specifically on ability for estimate lifetime value of ‘free customers’. An interview approach will be applied to 18 key persons of the supermarket and hypermarkets. This is for gathering some information regarding the CLV model and approach that have been applied by them. The Seberang Perai of Penang of Malaysia has  as a study setting for this study where involved 4 Hypermarkets and 14 Supermarkets. At the end, suggestions will be made for strengthening the usability of CLV model for estimate lifetime value of ‘free customer’ with specific attention on the potential used of spatial information.

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