Somnath Banerjee, NDSU associate professor of marketing, was recently quoted in an online WalletHub story. Banerjee was among the experts cited in the story, “Best Credit Card Deals,” by John Kiernan.
“In industries, like credit cards, telecommunications etc., where firms sell to consumers over time, firms generate profit from customers not just from one off transactions but rather through their long term relationship with the customer and the associated cash flow over time,” Banerjee said in the story. “In such context, a concept called customer lifetime value is popular in the marketing field that captures the notion of overall value of the customer relationship with the firm and not just one off transactions. When we look at the marketing of credit cards by firms from the lens of customer lifetime value concept, their big sign-up bonus as an acquisition cost of acquiring customers makes sense because the credit card issuing company later recover the acquisition cost through the revenue that they generate from consumers’ usage of the credit cards over time through interest income, interchange fees etc. For example, a credit card issuer could be offering $100 sign-up bonus on a card but would generate $1.5 in interchange fee for every $100 consumer spend on the card. If the customer spends $10,000 over the course of next year, the credit card issuer could generate a profit of $50 (abstracting away from interest rate and time value of money related factors).”
Banerjee’s research interests are in sales management, sales incentives, sales-marketing interface, online marketing, competitive marketing strategy and quantitative marketing.
He earned his bachelor’s degree at Patna University, India; his Master of Business Administration from the International Management Institute, India; and his doctorate at the University of Central Florida.
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