Exploring the interface between management accounting and marketing: a literature review of customer accounting
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Exploring the interface between management accounting and marketing: a literature review of customer accounting Kohsuke Matsuoka1
© Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract The availability of customer data has been enhanced in the digital economy, which can be used to measure the performance of marketing activities. Accounting techniques using customer data are collectively called customer accounting (CA). To seek the interface between management accounting and marketing, this study first discusses the three accounting weaknesses (the lack of revenue milepost information, revenue sustainability measurements, and intangibles capitalization) and relate them to marketing concepts (customer journey, customer acquisition and retention, and customer assets). Next, this study reviews literature on CA. Revenue accounting (RA), which focuses on revenue in an accounting period, and aims at the planning and control of marketing. Customer profitability analysis (CPA) has developed in the stream of strategic management accounting. The central focus of CPA is the allocation of selling, general and administrative expenses to individual customers through activity-based costing. Customer lifetime value and customer equity (CLV and CE) focus on the present value of cash flow from customer acquisition and retention. While RA and CPA respectively focus on revenues and costs in an accounting period, CLV and CE take cash flows in all future periods into consideration. Finally, links of each CA tool to the three marketing concepts are discussed to seek further development of CA. Keywords Customer accounting · Customer equity · Customer lifetime value · Customer profitability analysis · Revenue accounting JEL Classification M31 · M41
* Kohsuke Matsuoka [email protected]‑gakuin.ac.jp 1
Tohoku Gakuin University, 1‑3‑1 Tsuchitoi, Aoba, Sendai, Miyagi 980‑8511, Japan
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K. Matsuoka
1 Introduction In the digital economy where companies can utilize big data, including affluent customer data, the importance of customer assets is more emphasized, because personalization supported by customer data and information technology allows firms to build customer relationships, which results in increased revenues from retained and expanded customers than from newly acquired customers (Rust and Ming-Hui 2014; Rust and Tuck Siong 2006). Edeling and Himme (2018), combining their results with those from another meta-analysis (Edeling and Fischer 2016), conclude that customer assets have a greater impact on a firm financial performance than market share and brand assets. In addition, in a study on the impact of customer metrics disclosure on uncertainty for analysts and investors, Bayer et al. (2017) found that, in the US telecommunication industry, the disclosure of the expected future performance of customer metrics reduces variance in earnings forecasts and daily stock returns without hurting the firm’s financial performance. To accumulate customer assets, strategic decision making for marketing
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