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Increasing Customer Lifetime Value by Encouraging Customers to Pay Less in a Competitive Electricity Market

경쟁적 전력 시장 하에서 고객의 비용 절감을 통한 고객 평생 가치 증대에 관한 연구

  • 권귀석 (안양과학대학 e-비즈니스경영과) ;
  • 조진형 (동양공업전문대학 전산정보학부) ;
  • 강환수 (동양공업전문대학 전산정보학부)
  • Received : 2009.07.27
  • Accepted : 2009.09.15
  • Published : 2009.12.28

Abstract

The electrical power industry has been recognized as a natural monopoly industry for its technological and industrial characteristics. However, a competitive market system has been introduced to that industry in Europe, North America and Australia to overcome the inefficiencies originated from the monopolistic system for decades. In Korea, the power industry is expected to be placed in a competitive market system within several years after separation and privatization of vertically integrated industry in progress. Hence, there is a need for a research on the increase of customer value in that industry, however, existing studies have little dealt with that problem and there is no research on the price policy to consider churn and retention of customers. Therefore, this study provides a methodology for increasing customer loyalty and lifetime value by presenting the lowest pricing plan which leads to diminishing customers' cost. It is verified through an empirical examination that firms can enhance customer loyalty using a price element in that industry and maximize their profit by finding out customers whose lifetime values would increase.

Keywords

Electrical Power Industry;Competitive Electricity Market;Customer Lifetime Value;Customer Loyalty

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