Photo of Peter Fader

Peter Fader

Frances and Pei-Yuan Chia Professor

Professor of Marketing

Research Interests: lifetime value of the customer, sales forecasting for new products, using behavioral data to understand and forecast shopping/purchasing activities across a wide range of industries. managerial applications focus on topics such as customer relationship management

Links: CV,, Twitter (@faderp), Google Scholar page

Managing the Value of Customer Relationships

Applied Probability Models in Marketing

  • MKTG775 - Managing Customer Value

    As the concept of CRM becomes common parlance for every marketing executive, it is useful to take a step back to better understand the various different behaviors that underlie the development of successful CRM systems. These "behaviors" include customer-level decisions, firm actions, and the delicate but complex interplay between the two. Accordingly this course is comprised of four main modules.

    We start with the discussion of customer profitability - focusing on the concepts of "customer lifetime value" and "customer equity". We will examine how to measure long-run customer profitability in both business-to-customer and business-to-business environments, and the uses of these measures as major components assessing overall firm valuation. Second, we move to the value that the firm provides to its customers - better understanding the true nature of customer satisfaction and its non-trivial relationship with firm profitability. Third, we examine each of the three main components of the firm's management of its customer base: customer acquisition, development, and retention - and the complex resource allocation task that must be balanced across them. Finally, we conclude with a discussion of various tactical and organizational aspects of customer relationship management.


  • MKTG995 - Dissertation