When V. Kumar – or “VK,” as he is called – spoke at Texas A&M’s Mays Business School, he condensed 15 years of work into an engaging presentation that introduced the concept of Customer Lifetime Value (CLV), based on the customer valuation theory, as a metric to provide a reliable, forward-looking estimate of customer value.
“You cannot buy and sell customers, but this theory guides us in evaluating customers so we know which to value as assets, who to keep in our portfolio of customers and who to nurture as profitable customers,” he said. “Once you value a customer, you want to keep him.” Kumar’s visit was part of the 2016 Dean’s Distinguished Scholar Lecture Series at Mays – a forum presenting distinguished scholars from an array of business disciplines. He spoke at the invitation of Dean Eli Jones, who described Kumar as a “dear friend and co-author” and “extremely prolific, a very good scholar and very warm-natured.”
Kumar traced the steps of any marketing project: Define the customer, then measure the future value of that customer – which he calls his Customer Valuation Theory. “It can predict customers’ purchases over the next three years with 85 percent accuracy – things like ‘How many times they’ll go shopping, what they’ll buy and how much they spend,’” he said. “Beyond three years, companies change their product composition and so the likelihood of error goes up.”
Over the next 10 years, he said, he plans to release an engagement strategy that will guide those steps.
Jones announced Kumar would be coming back to campus next academic year – as a Texas A&M University Institute for Advanced Study (TIAS) Fellow. TIAS elects Faculty Fellows from among top scholars who have distinguished themselves through outstanding professional accomplishments.
Kumar is currently at Georgia State University, where he is a Regents’ Professor, Lenny Distinguished Chair and Professor in Marketing. He is also executive director of the Center for Excellence in Brand and Customer Management.
He has blazed a trail in marketing and has won numerous awards in the United States, China and India. He is currently editor-in-chief of the Journal of Marketing and has published more than 250 articles in scholarly journals in marketing, as well as book chapters. He has also written 25 books, translated in at least six languages, including “Managing Customers for Profit,” Customer Relationship Management,” “Customer Lifetime Value” and “Marketing Research.”
Kumar was chosen as a “Legend in Marketing,” and his work was published in a 10-volume encyclopedia with commentaries from scholars around the world. Worldwide companies have reported gaining more than $2 billion when using models and strategies he developed.