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Transferring Portfolio Selection Theory to Customer Portfolio Management – The Case of an e-Tailer

  • Conference paper
Enterprise Applications and Services in the Finance Industry (FinanceCom 2007)

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 4))

Abstract

Investing in existing customers is widely accepted as a promising strategy because it is believed to be less costly than attracting new ones. Recent research by Reinartz et al. [38] provides indications, however, that it could also be profitable to simultaneously focus on a customer segment being more transaction-oriented. In this contribution – using the example of an e-tailer – we specifically look at the question regarding the optimal mix of different customer segments within a customer portfolio. Portfolio Selection Theory is applied to develop a model to determine the optimal proportion of the different customer types from a value-based risk management perspective. A first evaluation is realized with a publicly accessible set of empirical data from the e-tailer CDNow. The results of the model provide a basis for the alignment of future CRM-activities.

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Author information

Authors and Affiliations

  1. Institute of Economic Research, Department of Information Systems, University of Freiburg, Platz der Alten Synagoge, 79085, Freiburg, Germany

    Dennis Kundisch

  2. Institute of Computer Science and Social Studies, Department of Telematics, University of Freiburg, Friedrichstr. 50, 79098, Freiburg, Germany

    Stefan Sackmann & Markus Ruch

Authors
  1. Dennis Kundisch
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  2. Stefan Sackmann
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  3. Markus Ruch
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Editor information

Daniel J. Veit Dennis Kundisch Tim Weitzel Christof Weinhardt Fethi A. Rabhi Federico Rajola

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Kundisch, D., Sackmann, S., Ruch, M. (2008). Transferring Portfolio Selection Theory to Customer Portfolio Management – The Case of an e-Tailer. In: Veit, D.J., Kundisch, D., Weitzel, T., Weinhardt, C., Rabhi, F.A., Rajola, F. (eds) Enterprise Applications and Services in the Finance Industry. FinanceCom 2007. Lecture Notes in Business Information Processing, vol 4. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-78550-7_3

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  • DOI: https://doi.org/10.1007/978-3-540-78550-7_3

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-78549-1

  • Online ISBN: 978-3-540-78550-7

  • eBook Packages: Computer ScienceComputer Science (R0)

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