Determinants and Use of Customer Lifetime Value: The Case of Turkish Banking Industry

Abstract

It is widely accepted that customers differ substantially across industries and countries. Therefore, it is crucial to translate such differences to the models used for measuring Customer Lifetime Values (CLV). An important limitation of the previous studies in the literature, is that analysis of industry specific predictors in general, financial industry related factors in particular is scarce. Moving from this point, this study aims to analyse the Turkish finance industry in order to find which variables are used and/or should be used for measuring CLV, to propose an industry and culture-specific framework for the measurement of CLV, to find out the decision areas that CLV is used and/or should be used, and to take the general picture of CLV studies in the industry. After the presentation of the literature review about the studies on common determinants used in CLV measurement models and the application areas of CLV in marketing decisions, the results of the exploratory study through in-depth interviews held with industry experts are summarized. The findings of the research and the proposed framework for prediction of potential CLV are believed to constitute a valuable guide for both practitioners and researchers of this area.