Abstract
The requirement for marketing expenditures to be financially justified is now very common, and increasingly this financial evaluation is done in terms of how the marketing strategy contributes to shareholder value. For many leading companies this led to an initial focus on financially evaluating and managing brands. Now the emphasis is turning towards valuing customer relationships, as marketing strategies become increasingly customer based.
This paper examines the latest thinking on applying financial evaluation and control techniques to these types of marketing strategies. The need for a more sophisticated approach to the financial valuation of customer relationship-based marketing strategies is discussed, involving conditional probabilities, simulations and possibly even real options. Many other implications of a more strategic financial approach in this area are also raised.
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Ward, K., Ryals, L. Latest thinking on attaching a financial value to marketing strategy: Through brands to valuing relationships. J Target Meas Anal Mark 9, 327–340 (2001). https://doi.org/10.1057/palgrave.jt.5740024
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DOI: https://doi.org/10.1057/palgrave.jt.5740024