Publications

November 2011 (Revised August 2012)
Background Note

Customer Discovery and Validation for Entrepreneurs

By: Frank V. Cespedes, Thomas Eisenmann and Steven G. Blank

Provides practical guidelines for conducting market research to explore and validate demand for entrepreneurial offering. Explains how the research objectives of entrepreneurs might differ from those relevant to managers evaluating product or service offerings to... View Details

Keywords: Customer Value and Value Chain; Entrepreneurship

June 2001
Case

Bang Networks- The First Customer (A)

By: Jay O. Light and Mary N. Caravella

In November 2000, six-month-old start-up Bang Networks is preparing a proposal for its first paid subscription contract. The recent MBA founders of the new San Francisco--based company believe they have a unique new solution for effective delivery of real-time Web... View Details

Keywords: Business Startups; Negotiation Tactics; Internet and the Web; Valuation; Value Creation; Negotiation Preparation; Information Technology Industry; San Francisco

Research Summary

Overview

By: Rob Markey

Most companies' leaders declare their commitment to delivering value to customers. Many have adopted language such as "customer-centric" or "customer-obsessed." Companies that consistently earn top marks for customer loyalty in their industry deliver total shareholder... View Details

Keywords: Customer Base Analysis; Customer Lifetime Value; Customer Experience; Customer Loyalty; Service Profit Chain; Management Accounting; Project Evaluation And Resource Allocation; Customer Value and Value Chain; Customer Satisfaction; Valuation; Customer Focus and Relationships

08 Aug 2005
Research & Ideas

A Balanced Scorecard Approach To Measure Customer Profitability

The Balanced Scorecard introduced customer metrics into performance management systems. Scorecards feature all manner of wonderful objectives relating to the customer value... View Details

Keywords: by Robert S. Kaplan

June 2017 (Revised January 2019)
Case

Signet Jewelers: Assessing Customer Financing Risk

By: Gerardo Pérez Cavazos, Suraj Srinivasan and Monica Baraldi

Marc Cohodes, a renowned short seller, has identified weaknesses in Signet's business strategy, which he argues is heavily reliant on providing loans to customers with subprime credit scores. He believes that the company accounts for its receivables portfolio using... View Details

Keywords: Short Selling; Bad Debt Expense; Accounting; Financial Reporting; Financial Statements; Finance; Financing and Loans; Valuation; Retail Industry; Financial Services Industry; United States

October 1990
Case

Manufacturers Hanover Corp.: Customer Profitability Report

By: Robert S. Kaplan

Banking company noting declining profitability from its traditional lending activities has started to measure the total profitability of its lending relationships. A loan pricing model estimates the profit and return-on-equity from commercial loans. Additional work was... View Details

Keywords: Investment Return; Revenue; Commercial Banking; Banks and Banking; Customer Value and Value Chain; Banking Industry

20 Dec 2017
Lessons from the Classroom

How to Design a Better Customer Experience

Click HereHarvard Business School Professor Stefan Thomke describes how his Executive Education students use LEGO blocks to design customer experiences. (Video by Executive Education) Why do some product or service experiences have enough... View Details

Keywords: by Dina Gerdeman; Health; Entertainment & Recreation

June 2017
Article

Creating Reciprocal Value Through Operational Transparency

By: Ryan W. Buell, Tami Kim and Chia-Jung Tsay

We investigate whether organizations can create value by introducing visual transparency between consumers and producers. Although operational transparency has been shown to improve consumer perceptions of service value, existing theory posits that increased contact... View Details

Keywords: Operational Transparency; Service Management; Production Management; Organizational Performance; Behavioral Operations; Service Operations; Service Delivery; Consumer Behavior; Labor; Organizational Design; Operations; Service Industry; United States; Kenya

June 2013
Case

Olympic Rent-A-Car U.S.: Customer Loyalty Battles

By: John Deighton and James T. Kindley

The marketing and operations managers for Olympic Rent-A-Car meet to decide how to respond to changes in the loyalty rewards program at the market-leading competitor. The competitor's program gives awards based on dollars spent instead of days rented and eliminates... View Details

Keywords: Customer Relationship Management; Competitive Strategy; Marketing; Operations; Auto Industry; Service Industry

05 Aug 2010
What Do You Think?

What Is Customer Opinion Good For?

Summing Up Customer inputs to the product development process count, but in different ways and at different times, according to many responding to this month's column. As Alexander Gat put it, competing and pioneering products "should... View Details

Keywords: by Jim Heskett; Technology

01 Mar 2004
What Do You Think?

Are Customer Loyalty Initiatives Worth the Investment?

to let customers acquire points or miles or any loot unconnected to the product they are using . . . It's about customers and suppliers caring for each other's success." As Alan de Winter put it,... View Details

Keywords: by James Heskett

Article

Putting the 'Relationship' Back into CRM

By: Susan Fournier and Jill Avery

Many managers think that the way to capture value through relationship marketing is to focus on the 'good' customers and get rid of the 'bad' ones. But there is a lot more to best practice relationship management than maximizing revenues on individual customers and... View Details

Keywords: Marketing; CRM; Customer Relationship Management; Brand Building; Brand Management; Customer Lifetime Value; Customer Focus and Relationships; Customer Satisfaction; Marketing Strategy; Brands and Branding; Consumer Products Industry

September 2022
Background Note

On CUE: The Quest for Optimal Customer Unit Economics

By: Elie Ofek, Barak Libai and Eitan Muller

Startups are often evaluated by how well they perform on unit economics, defined as the ratio of a customer’s lifetime value (LTV) to acquisition costs (CAC). A common target for unit economics, advocated by many VCs and analysts, is 3:1 (i.e., LTV/CAC=3). While there... View Details

Keywords: Unit Economics; Business Startups; Performance Evaluation; Customer Value and Value Chain; Customer Relationship Management; Analysis

October 2009 (Revised June 2011)
Case

Zappos.com 2009: Clothing, Customer Service, and Company Culture

By: Frances X. Frei, Robin J. Ely and Laura Winig

On July 17, 2009, Zappos.com, a privately held online retailer of shoes, clothing, and other soft line retail categories, learned that Amazon.com, a $19 billion multinational online retailer, had won its board of directors' approval to offer to merge the two companies.... View Details

Keywords: Mergers and Acquisitions; Customer Focus and Relationships; Decision Choices and Conditions; Governing and Advisory Boards; Service Delivery; Organizational Culture; Internet and the Web; Valuation; Apparel and Accessories Industry; Retail Industry

September 2010 (Revised August 2013)
Case

Liza Davis and the Bargain Hunting Customer

By: Francisco de Asis Martinez-Jerez and Lisa Brem

Liza Davis, an upscale women's fashion retailer, is reeling from worldwide recession and lower demand. Should the company target the fast-growing bargain hunter segment or hold the line on price discounts to preserve their brand image? Customer profitability... View Details

Keywords: Competitive Strategy; Price; Product Positioning; Customer Value and Value Chain; Business Cycles; Financial Crisis; Profit; Knowledge Use and Leverage; Fashion Industry; Retail Industry

10 Sep 2014
Research & Ideas

Become a Value Creator

value. After all, companies that make their purpose just about profit often do poorly because both their customers and their employees sense this quest for the almighty dollar, which makes them feel as if they are being squeezed rather... View Details

Keywords: by Dina Gerdeman

Article

The Cross Section of Bank Value

By: Mark Egan, Stefan Lewellen and Adi Sunderam

We study the determinants of value creation in U.S. commercial banks. We develop novel measures of individual banks' productivities at collecting deposits and making loans. We relate these measures to bank market values and find that deposit productivity is responsible... View Details

Keywords: Productivity; Banks and Banking; Valuation; Performance Productivity; Value Creation; United States

Read Now

April 2006
Background Note

Informing Service Management with Customer Data

By: Frances X. Frei and Dennis Campbell

Taught as the third module in a Harvard Business School course on Managing Service Operations. Explores the role of data analysis in ongoing service management. Describes how to realize the maximum amount of value from analyses and use this information in... View Details

Keywords: Decision Making; Design; Analytics and Data Science; Service Operations; Mathematical Methods; Value