The shareholder value and the customer lifetime value
approach are conceptually and methodically analogous.
Both concepts calculate the value of a particular
decision unit by discounting the forecasted net cash
flows by the risk-adjusted cost of capital. However,
virtually no scholarly attention has been devoted to the
question if any of the components of the shareholder
value could be determined in a more marketoriented way
using individual customer lifetime values. Therefore,
the main objective of this paper is to systematically
explore the contribution of both concepts to the field
of corporate valuation. At first we present a
comprehensive calculation method for estimating both the
individual lifetime value of a customer and the customer
equity. After a critical examination of the shareholder
value concept, a synthesis of both value approaches
allowing for a disaggregated and more realistic
corporate valuation will be presented. pdf
