CLV MODEL APPLICATION IN BANK CLIENTS’ PROFITABILITY PROJECTION PROCEDURE

Danijela Andjelković; Milan Djurović

Authors

Danijela Andjelković Faculty of Economics and Finance in Belgrade
Milan Djurović Faculty of Economics and Engineering Management in Novi Sad

Keywords:

banking, finance, marketing, profit, CLV model, customers

Abstract

Nowadays, bank clients’ profitability analysis represents a new field and modern tendencies in various disciplines such as accounting, finances and especially marketing. Bank clients’ actions, methods and measures of value help managers anticipate the future profit level the banks will achieve. Among all available measures, the experts estimate that CLV – customer lifetime value is the most comprehensive and accurate measure of value for customers, thus bank clients, as well as largely future-oriented. The topic of research in this paper is to indicate that customer relationship marketing concept – CRM has proved very useful in banking, and it has become an important factor in competitiveness as well as the achievement of better business results. However, marketing can hardly help any bank achieve long-term profitability without the appropriate financial support. In this context, the research in this paper deals with the advantages in CLV concept application to bank client profitability projection, thus providing long-term profitability feedback for the bank. CLV concept has accelerated necessary marketing and financial activity integration. CLV is the link connecting these two interrelated and mutually dependent business functions, introducing a multidisciplinary approach to bank clients’ profitability projection.

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