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Customer Portfolio Management: Toward A Dynamic Theory Of Exchange Relationships, Michael D. Johnson, Fred Selnes
Customer Portfolio Management: Toward A Dynamic Theory Of Exchange Relationships, Michael D. Johnson, Fred Selnes
Michael D. Johnson
Management of an entire portfolio of customers who are at different relationship stages requires a dynamic theory of exchange relationships that captures the trade-offs between scale economies and lifetime customer value. This article contributes to the understanding of relationship management by developing a typology of exchange relationship mechanisms and a model of relationship dynamics and by simulating the model to provide guidelines for customer portfolio management. An important insight from the research is that a key to the creation of value through closer relationships lies in bringing weaker relationships into a portfolio in the first place. Another insight is that …