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The lifetime value scorecard: From E-metrics to internet customer value

Performance Measurement and Management Control: Measuring and Rewarding Performance

ISBN: 978-0-7623-1479-9, eISBN: 978-1-84950-571-0

Publication date: 4 August 2008

Abstract

The aim of this chapter is to develop a performance measurement framework for understanding the relationships among drivers of customer profitability in internet companies.

We recognize an opportunity to improve management control systems for internet companies, where performance measurement systems currently focus on measuring web data, such as number of customers, cost of service, cost of acquisition (CoA), and churn rate. However these indicators, taken separately, do not provide useful information to make decisions.

To fill this gap we developed a framework, which we designate as the Lifetime Value Scorecard, to investigate the relationships between customer data and financial data, providing an early indication as to whether or not the marketing strategies being implemented are successful. We then offer an application of the Lifetime Value Scorecard to the mobile value-added services industry, where content and services are provided to consumer cell phones, mainly using wireless networks.

Citation

Bonacchi, M., Ferrari, M. and Pellegrini, M. (2008), "The lifetime value scorecard: From E-metrics to internet customer value", Epstein, M.J. and Manzoni, J.-F. (Ed.) Performance Measurement and Management Control: Measuring and Rewarding Performance (Studies in Managerial and Financial Accounting, Vol. 18), Emerald Group Publishing Limited, Bingley, pp. 193-226. https://doi.org/10.1016/S1479-3512(08)18009-1

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited