The role of customer relationship management (CRM) to develop lifetime customer profitability analysis model (LCPAM) : a case study of Australia

The paper examined the role of customer relationship management (CRM) to develop lifetime customer profitability analysis model of a major multinational Australian retail bank using case study research approach. The current system limits the bank to use effectively customer profitability information to support its marketing strategy which the paper suggests to be based on market segmentation, extensive use of activity based costing (ABC) and calculating customer relationship revenues and relationship costs. A hypothesized LCPAM model was developed after reviewing the existing literature and the model was revised based on the comments from the participants. The revised model has contributed to the literature with the discovery of some new drivers of revenues and costs. The revised model if implemented will improve the lifetime customer profitability analysis system in retail banks. The model has also implications for further research by other researchers in the new area of amalgamating relationship management and management accounting.