In recent decades, large corporations have undertaken a desperate race of mergers and acquisitions. Sectors such as banking, insurance, telecommunications, the pharmaceutical industry, or the automotive industry have been the main players in this race to lower prices, optimize resources, search for new and prosperous markets, and economic growth.

However, the value that is generated rarely makes the transaction profitable. Approximately 50% of the merger and acquisition operations of the last 30 years have not produced an added value.

The problem begins when an inexistent value is given to the intangible part of the acquired company. When Terra paid 1.25 billion dollars to acquire Lycos, it became one of the world’s main Internet companies, with more than 40 million users. In the end it was proven that, in a sector in which customers barely generate direct income, it was too ambitious to value them so highly. In July of 2004, Telefonica got rid of Lycos, selling it to the South Korean company Daum Communications for the equivalent of 1% of what they paid for it 4 years earlier.

In a merger or acquisition operation, the calculation of the value of intangibles is left to the bank. The area of goodwill is the where aspects such as knowledge, employees, or the brand are calculated, but it is usually done without logical criteria, leaving the customers aside.

There are known formulas for estimating a customer’s spending, such as ARPU
(Average Revenue per User) or MOU (Minutes of Usage), but they focus only on one aspect of the total value –spending-, which must be expanded with much more complete metrics (profitability, acquisition cost, value as customer, frequency, recurrence…), in order to reflect the true customer value and their possible lifespan.