A customer lifetime value analysis for the conurbations of Erfurt and Vilnius

Abstract

This paper presents a new conceptual framework to analyse the effects of forthcoming demographic changes onto the customer bases and expected revenues of urban and regional public transport providers. Implying that the providers are forced to cope with the increasing importance of stable customer relations, we propose an adapted “Customer Lifetime Value” model, with interrelated sub-models for every segment, to individually assess the economic value of existing and future customers – as a base for more customer-centric marketing measures as well as corporate development strategies. First, a formal description of this long-term planning method is established. Later its application in ongoing case studies for the commuter markets of the sister cities Erfurt and Vilnius is discussed.