We address a critical question that many firms are facing in this era of "big data'': Can customer data be stored and analyzed in an easy-to-manage and scalable manner without significantly compromising the inferences that can be made about the customers' transaction activity? We address this...

The Tuscan Lifestyles case (Mason 2003) offers a simple twist on the standard view of how to value a newly acquired customer, highlighting how standard retention-based approaches to the calculation of expected CLV are useless in a noncontractual setting. Using the data presented in the case, it...

Several researchers have proposed models of buyer behavior in noncontractual settings that assume that customers are “alive” for some period of time and then become permanently inactive. The best-known such model is the Pareto/NBD, which assumes that customer attrition (dropout or...

Companies in a variety of industries (e.g., airlines, hotels, theaters) often use last-minute sales to dispose of unsold capacity. Although this may generate incremental revenues in the short term, the long-term consequences of such a strategy are not immediately obvious: More discounted...

Firms in several markets attract consumers by offering discounts in other unrelated markets. This promotion strategy, which we call "cross-market discounts," has been successfully adopted in the last few years by many grocery retailers in partnership with gasoline retailers across North America,...

We propose a framework for the joint study of the consumer’s decision of where to buy and what to buy. The framework is rooted in utility theory where the utility is for a particular channel/brand combination. The framework contains firm actions, the consumer search process, the choice...

The marketing and operations management arms in a firm must work in coordination – marketing efforts to create demand go to waste if supply is suboptimal, and vice versa. However, achieving this coordination has remained a long-standing problem, because in most firms these units are managed in...

Over the past few years, firms in the travel and entertainment industries have begun using novel sales strategies for revenue management. In this chapter, we study a selling strategy called opaque selling, in which firms guarantee one of several fully specified products, but hide the identity of...

The Tuscan Lifestyles case (Mason 2003) offers a simple twist on the standard view of how to value a newly acquired customer, highlighting how standard retention-based approaches to the calculation of expected CLV are not applicable in a noncontractual setting. Using the data presented in the...