Paper info: Customer Roles in Shareholder Value Creation - An Empirical Investigation of Customer Asset Management Strategies
Customer Roles in Shareholder Value Creation - An Empirical Investigation of Customer Asset Management Strategies
Place of Publication
The paper was published at the 24th IMP-conference in Uppsala, Sweden in 2008.
The research described in this paper aims at creating a framework describing how customer asset management can influence both P&L and balance sheet drivers of shareholder value. Extant literature on customer asset management is mainly concerned with earnings as a driver of shareholder value, giving less attention to the other drivers (capital structure, risk). We argue that economic profit should be used as a measure of shareholder value creation as it acknowledges both the operating and financial expenses and allows individual customer relationship level analysis. Hence, the developed framework suggests that the drivers of shareholder value can be divided into four main categories: revenue, cost, asset utilization, and risk. In the article we identify thirteen distinct roles for customer asset management that influence the four shareholder value drivers. Furthermore, we report empirical research consisting of three longitudinal case studies describing customer asset management strategies formulated in a B2B context in order to improve shareholder value creation. The findings of the empirical research suggest that B2B firms are able to acknowledge all suggested four shareholder value drivers in customer asset management and that firms should differentiate their marketing strategies in order to move customer asset management beyond traditional acquisition-retention optimization.