Customer Lifetime Value: Value Analysis of Customers for a Cellular Phone Operator - The Vivo Case

Abstract

The objective of this study is to evaluate customer value for a mobile operator (VIVO), based on the Customer Lifetime Value model (CLV), with the purpose of analyzing how the Brazilian mobile operators‟ industry evaluates its customers and the impact this evaluation might have on retaining customers, especially among those considered to be highly valuable. Supported by the company's annual report and internally collected data, CLV calculations were developed in order to understand how the company's handset subsidies policy could be structured around customer value. The results of this case study show clear differences in value between customer segments, indicating that visions of value and customer management present in the literature are important steps to increase a firm's value strategic management.