INTEREST CATEGORY: MARKETING RESEARCH
POSTING TYPE: Awards

Author: Koen Pauwels

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Dan McCarthy’s Customer-Based Valuation Wins 2019-2020 Gary Lilien ISMS-MSI-EMAC Practice Prize

The 2019-2020 Gary Lilien ISMS-MSI-EMAC Practice Prize has been awarded to Prof. Daniel McCarthy (Emory University) for his work ‘CBCV: Reshaping the Practice of Corporate Valuation Using a Customer- Driven Approach’ by the Chairman of the Judges and ISMS VP of Practice, Prof. Koen Pauwels.

Prof McCarthy presented evidence of excess returns from a trading strategy on the basis of Customer Based Corporate Valuation (CBCV). CBCV is both straightforward to implement (requiring only publicly available data), and based on solid marketing science principles of valuing the current and likely future income streams from a company’s market-based assets, in particular its customers. The CBCV analyses of Blue Apron, HelloFresh, Farfetch, Lyft, Revolve Clothing, and Wayfair has significantly influenced the practice of corporate valuation, as demonstrated in the reactions of the stock market, media, securities law, Wall Street analysts, regulatory bodies, and professional investors.

The other finalists (in alphabetical order) were:

‘The Comprehensive Effects of Sales Force Management: A Dynamic Structural Analysis of Selection, Compensation, and Training’ by Doug Chung, Byungyeon Kim (Harvard) and Byoung G. Park (Albany)

‘Machines and Humans: Field Experiments on Generating Business Value from Artificial Intelligence Chatbot in a Financial Services Company’ by Xueming Luo, Siliang Tong (Temple), Zheng Fang (Sichuan) and Zhe Qu (Fudan).

All three finalists benefitted from the feedback by John Roberts and Gary Lilien at their rehearsal. Along with Prof. Koen Pauwels, the judges for the competition were:

• Kusum Ailawadi, Charles Jordan 1911 TU’12 Professor of Marketing at the Tuck School of Business at Dartmouth;
• Michael Cohen, Chief Data & Technology Officer at Marketing Evolution;
• Robert Moakler, Quantitative Researcher at Facebook;
• Greg Pharo, Global Director, Marketing Analytics and Research at Coca-Cola;
• John Wittenbraker, Managing Director & CSO of the Global Science Organization at Ipsos

The Award competition and the ceremony took place June 12 at the INFORMS Society for Marketing Science Conference held virtually by Duke University.  Established in 2003, the Gary Lilien ISMS-MSI-EMAC Practice Prize is awarded for an outstanding implementation of marketing science. The method used must be sound and appropriate to the problem and organization, and the work should have had significant, verifiable and, preferably quantitative impact on the performance of the client organization.

Past papers describing these marketing science implementations are available in the journal Marketing Science.  Videos of past finalists and winners are available at http://lilienpracticeprizevideos.org/ and on the dedicated YouTube channel https://www.youtube.com/channel/UCrS2aW6TiebaWVMjGGFH8oQ, where the above finalists will soon be available.

Enquiries: Koen Pauwels (kpauwels@northeastern.edu)  Vice President Practice ISMS