Balancing Acquisition and Retention Resources to Maximize Customer Profitability

Author(s): Werner Reinartz \| Jacquelyn S. Thomas \| V. Kumar
doi: 10.1509/jmkg.69.1.63.55511
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Journal of Marketing

Print ISSN: 0022-2429 | Electronic ISSN: 1547-7185

Volume: 69 | Issue: 1

Cover date: January 2005

Page(s): 63-79



Keywords

customer relationship management, customer profitability, resource allocation, acquisitions, retention



Abstract

In this research, the authors present a modeling framework for balancing resources between customer acquisition efforts and customer retention efforts. The key question that the framework addresses is, “What is the customer profitability maximizing balance?” In addition, they answer questions about how much marketing spending to allocate to customer acquisition and retention and how to distribute those allocations across communication channels.



Author(s) affiliations

1. Associate Professor of Marketing, INSEAD

e-mail: werner.reinartz@insead.edu

2. Associate Professor of Integrated Marketing Communications, Northwestern University

e-mail: jakki@northwestern.edu

3. ING Chair Professor and Executive Director, ING Center for Financial Services, School of Business, University of Connecticut

e-mail: vk@sba.uconn.edu



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