Concepts of Customer Value
In light of the digital transformation relationship marketing as the heart of strategic CRM has gained substantial traction as markets get increasingly competitive and customers get increasingly demanding. In order to stay relevant, companies must create value for the customers while at the same time extracting enough value from them. Strategically implemented CRM is a key component to meet this challenge by balancing Customer Perceived Value and Company Value. Using a customer-value based approach to CRM, profits for the company as well as the satisfaction of their customers can be increased in the long run. Subsequently, the underlying processes are illustrated using the Satisfaction-Loyalty-Profit Chain (SPC). We explain why delivering value to the customers in the end translates to value for the firm. Moreover, we describe the different dimensions of value that a company can derive from customers and we consider various links within the SPC. Finally, using empirical studies this chapter shows that these links are not always linear and symmetric, and vary across industries and customer segments.
- EIU. (2007). Beyond loyalty: Meeting the challenge of customer engagement part I. The Economist Intelligence Unit, 2007. http://graphics.eiu.com/files/ad_pdfs/eiu_AdobeEngagementPt_I_wp.pdf. Accessed December 07, 2016.
- EIU. (2016). Industries in 2017: A special report from The Economist Intelligence Unit. The Economist Intelligence Unit Limited, 2016. http://www.eiu.com/Handlers/WhitepaperHandler.ashx?fi=Industries-in-2017.pdf&mode=wp&campaignid=Industriesin2017. Accessed December 07, 2016.
- Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E., Jr., & Schlesinger, L. A. (1994). Putting the service-profit chain to work. Harvard Business Review, 72(2), 164–172.Google Scholar
- Ittner, C. D., & Larcker, D. F. (2003). Coming up short on non-financial performance measurement. Harvard Business Review, 81(11), 88–95.Google Scholar
- Jones, T. O., & Sasser, W. E., Jr. (1995). Why satisfied customers defect. Harvard Business Review, 73(6), 88–99.Google Scholar
- Lego. (2017). How it works. https://ideas.lego.com/howitworks. Accessed April 18, 2017.
- Reichheld, F. F., Markey, R. G., Jr., & Hopton, C. (2000). The loyalty effect – the relationship between loyalty and profits. European Business Journal, 12(3), 134–139.Google Scholar
- Reinartz, W., & Kumar, V. (2002). The mismanagement of customer loyalty. Harvard Business Review, 80(7), 86–94.Google Scholar
- The Regeneration Roadmap. (2012). Re:Thinking Consumption: Consumers and the Future of Sustainability. http://www.theregenerationroadmap.com/files/reports/TRR_Rethinking_Consumption.pdf. Accessed April 18, 2017.