Customer lifetime value

: the Galp Energia case

Abstract

Customer Lifetime Value is an essential tool that companies have available and one of the most studied subjects lately. With the understanding of the value of a customers for the company and the knowledge about each group of customers it is possible to act more effectively in such a changing environment like the one we are facing in the utilities sector with the liberalization of the market. This dissertation aims at understanding the value of customers for companies in the utilities sector, namely in Galp Energia, through the estimation of Customer Lifetime Value elements such as Current Value, Potential Value and Customer Loyalty to then segment the customer base and direct marketing efforts in a more efficient way. To do so, we performed a research to the existing models and after selecting the most appropriate one, we conducted an analysis using Galp Energia’s customer database in order to estimate the lifetime value in the three dimensions. Based on the analysis performed we were able to conclude that Galp Energia’s customers have space to growth within the company, if the right strategies are applied. Further, it was conducted a segmentation analysis using the CLV elements estimated previously in which we divided the customers’ database into 8 segments and were able to direct recommendations to each one.

Date of Award	2015
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Rute Xavier (Supervisor)