Customer Value Maximization: Management and Cycle

What is customer value maximization? customer value is based on a customer relationship quality as experienced from the sides of both the customer and the marketer. value is created by products and services when they benefit customers by satisfying their needs. it is a function of cash flow profitability and customer service.

The following five-step model is used for creating and managing customer value.


Customer Value Maximization - Customer Value Management Model
Customer Value Maximization - Customer Value Management Model

  • Step 1 discover understand customer needs and behavior
  • Step 2 commit: commit toward delivering value to customers
  • Step 3 create: create customer value
  • Step 4 assess: obtain customer feedback and analyze it
  • Step 5 improve: measure and improve customer value

The customer value management or CRM model aims to create value for customers and suppliers. customer value is generated through superior products and services that provide a benefit that is recognized through the payment of an agreed-upon price. value accrues to a supplier through the price received. CDM has two basic goals to deliver superior customer value to identified customer segments and to get an equitable return on offered value.

Customer Value Maximization: Customer analysis


This focuses on assessing customer segments that the company serves. it involves identifying target customers, understanding their needs, and showing how the products and services can satisfy these needs. market surveys test marketing feedback from the sales team and channel partners and other such tools help to collect data regarding customers' needs and behaviors.

Customer Value Maximization: acquisition


Various marketing techniques are used to generate customer prospects and inquiries. customer acquisition involves methods and strategies for dealing with these inquiries. customer acquisition management can be considered as a bridge between advertising and CRM.

Customer Value Maximization: retention


It is well known that the cost of acquiring a customer its five times that of retaining an existing customer. this is why companies focus on customer retention strategies and the benefits of word-of-mouth promotion that loyal customers bring.

Customer Value Maximization: expansion


customer expansion can be practiced as follows:

  • Selling more products or services to existing customers
  • Upgrading customers to higher levels of service
  • Increasing usage of products and services by customers
  • Launching new products and services

Customer Value Maximization: lifetime value


Customer lifetime value represents how much a customer is worth in terms of monetary value and therefore how much money should be spent on acquiring and retaining that customer by the company marketing department.

Let's look at an example of customer acquisition

German carmaker Volkswagon spent good money on the talking newspaper campaign to acquire customers. in 2010 Volkswagen has amused the novel audio advertisement in print media to create a buzz about its entry-level sedan Vento. The device playing a voice recorded a message in a campaign that Volkswagen is believed to have spent on. 2.2 million ships were specially sourced for this one-time exercise. Mediacom managed Volkswagens media planning operations and an advertising agency handled the creatives. Volks ones will aim to emotionally connect customers with their product. Volks hasn't described this campaign as the world's first talking newspaper with Fox wagon Vento.

Customer Value Maximization: acquisition platform


Launched in 2012 Leadsquared is a customer acquisition platform that provides lead capture automation, marketing automation, sales acceleration marketing, and sales analytics and other benefits. with over 250 clients including flip card by juice, way down to Delton, Randstadtime straw and others that company aims to generate over USD 1.5million in revenue in 2015 and 16. lead capture automation is defined as capturing leads from various sources such as inbound mail, online campaign, phone calls, lead generation websites and others. marketing automation uses drip marketing and trigger-based emails.

Related Article: Create Lead Magnet - Lead Magnet Ideas for 2020

Customer Value Maximization: implementing CVM


The following issues should be focused on for successful CVM implementation

  • Deciding factors that lead to successful application of CVM in practice.
  • Understanding advantages of CVM implementation
  • Role of analytics quality of data and work culture
  • Skill gaps to be covered in customer intelligence and market analysis departments
  • Working toward cooperation between customer intelligence and marketers
  • Amount of efforts to put into CVM implementation
  • Effects of excessive focus on customer data

Customer Value Maximization: Satisfaction profit chain


The satisfaction profit chain was designed in the 1990s to show the exact relationship and interconnectivity between satisfaction, loyalty that attention and profits thus linking directly to CRM. link between satisfaction and retention is unequal.

Satisfaction - retention


dissatisfaction impacts our attention more than satisfaction does. only a satisfied customer can be retained successfully. retention is not guaranteed even if the satisfaction level is high, because many competitors may be ready with a similar product to fulfill the customer requirements. if customers are dissatisfied other products become more appealing to them.

Link between customer satisfaction and profits


satisfaction profits direct links such as better customer experience improve customer satisfaction with the firms offering increases ultimately leading to increase profits. there is always a positive correlation between customer satisfaction and return on assets. improving customer satisfaction incurs a cost and once this cost is considered to offer excessive satisfaction could be considered infeasible.

Let's look at an example of a brand that covers satisfaction loyalty retention and profits.

Maruti Suzuki satisfaction and loyalty


Maruti Suzuki has many satisfied and long customers, indicated by the fact that it is the leading brand with close to 50% market share in the passenger car segment.

Retention


Nixa Maruti Suzuki is a premium distribution channel in July 2015Maruti Suzuki launched premium next dealership centers for showcasing and selling his premium range of cars such as s cross and Bellino. Nexa was launched to provide a better experience to customers opting for premium vehicles. this helped Model T retain customers who typically prefer them as their first basic car but not as a premium upgrade.

Profit and sales


As of April 2016 Nexa are contributed 8% to margins total annual sales and expected to attain a double-digit share by 2017. Maruti plans to increase the number of Nexa outlets to 250 by 2017. Maruti also plans to launch exclusive nexus service outlets for premium customers who own the Nexa range of cars.

Customer Value Maximization: CRM strategy cycle


Customer acquisition


Various marketing techniques are used to generate customer prospects and inquiries. customer acquisition involves methods and strategies for dealing with these inquiries. customer acquisition management can be considered as a bridge between advertising and CRM.

Customer retention


it is well known that the cost of acquiring a customer is five times than that of retaining an existing customer this is why companies focus on customer retention strategies and the benefits of word-of-mouth promotion that loyal customers bring.

Win backstage


customer win back is a crucial part of the CRM strategy. regaining lost customers can lead to increase rates of repeat selling and a higher return on investment compared to brand new selling. as customers and the acquisition phase are essentially unprofitable and become increasingly profitable as the relationship continues for longer.

Example of customer retention and loyalty


Shoppers stop started in the year 1991 with its first store. its target market is middle and upper-middle-class customers. shoppers tops first citizen long program has more than 3.7 million customers who contribute 72% to the sale. The first citizen program has three-tier: classic moments entry-level silver edge, and golden glow.

I hope this article on Customer value maximization has been helpful for you. Please help me by sharing it across social media and feel free to follow me on Twitter.

Comments

Popular posts from this blog

10 Websites That Will Pay You DAILY Within 24 hours!

Artificial Intelligence is Revolutionazing Digital Marketing

#Digital_Product Guidelines: digital products for 2020