Michael Beverland*

ABSTRACT

Customer Engagement Value (CEV) has emerged as a significant construct for evaluating the multidimensional value generated through customer–firm interactions. Unlike traditional customer valuation approaches that primarily focus on transactional behaviors, CEV incorporates both transactional and non-transactional contributions made by customers. This study develops a comprehensive and realistic framework for understanding the dynamics of customer engagement through the integration of Customer Lifetime Value (CLV), Customer Referral Value (CRV), Customer Influencer Value (CIV), and Customer Knowledge Value (CKV). Existing studies have largely examined these dimensions independently or relied on conceptual and gamified approaches that insufficiently represent actual market interactions. To address these limitations, the present research proposes a non-linear model capable of capturing the interdependent relationships among CEV components. The elasticity parameters associated with each engagement component were determined through an online survey and incorporated into a System Dynamics (SD) framework to simulate customer engagement behavior over time. The findings indicate that both purchasing and non-purchasing engagement behaviors significantly contribute to overall customer value creation. The proposed framework provides a strategic tool for organizations seeking to improve long-term customer relationships and sustainable business performance. The study further recommends the application of the model using real-world organizational data to validate and enhance its practical effectiveness. Keywords: Customer Engagement Value (CEV), Customer Lifetime Value (CLV), Customer Referral Value (CRV), Customer Influencer Value (CIV), Customer Knowledge Value (CKV), System Dynamics (SD), Relationship Marketing.