Customer Value Concepts
Customer Lifetime Value (CLV)...
... is the net present value of cumulative profit derived over the duration of a customer relationship, as seen from the seller's viewpoint. (also known as Customer Franchise Value)
Value from the customer's viewpoint requires a holistic view of the combined value of the product, service, personnel and brand image compared to the combined cost in
terms of money, time, energy, and worry. And all of this must be
a higher value than the next best alternative.
|
80-20-30 rule ...
20% of a firm's customers generate 80% of the profits, half of which
are lost serving the bottom 30% of unprofitable customers. The most
successful marketers nurture the strongest relationships with their
most profitable customers.
A 5% increase in the number of loyal customers results in profit
increases of 25% to 85%, depending on your industry. This is due
to long-term customers' tendency to provide referrals, buy across
product lines, cost less to serve, and to be less price-sensitive.
Use value analysis as a guideline for customer listening strategies, executives’ strategic decisions, and front-line tactical decisions.
|
