Customer Lifetime Value, Value Chain & Mass Customization In today’s economy it is crucial that companies provide customers with not only quality products by more importantly high quality customer service. Organizations are realizing the that customers are valuable resources that require more than just quality products but strategies to deliver value to customers.
Questions
Question 1: CRM & CLV Not all customers have the same value to the organization. What does this mean in terms of managing CRM? How is this related to the concept of Customer Lifetime Value? To begin with, customers and organizations perceive value in different ways and since not all customers are the same they perceived value in different ways. Customers perceive …show more content…
One of the main reasons, customers are the main source of competitive advantage and revenue generator. (Woodruff, 1997) Additionally, customer value is based on the level of involvement a customer makes in the decision process. Specifically, how personally important or interested that customer is in obtaining a product and how the experience the customer received on an emotional level while interacting with the organization and its product and/or services.
To explain the different levels of customer value to organizations, there is a low level customer that searches different companies looking for the product they want, comparing them, then deciding to purchase with no bond to any particular company. (Smith, 2014)
Next, there are high level customers that create a higher risk for organizations for the reason that the customer’s experience creates the value to the customer. That is to say, the customer’s interactions with the company and the emotional appeal of the relationship with the company, its products, and services. (Woodruff, 1997; Souca, 2014; Souca, …show more content…
Figure 1. Impact Customer Relationship Management has on Customer Satisfaction and Customer Loyalty. (Aimin & Shunxi, 2011)
Question 3: Value Chain What do we mean by the value chain? Why is this an important concept in CRM? According to Porter, (1985) the value chain concept is a means of identifying each of the business actions or stages that transformed inputs into outputs. (Michael, 2011)
CRM is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers for profit. (Martin, 2015) CRM builds the communication channel of value delivery between the organization and the customer making it more effective. (Michael, 2011)
Figure 2. Classification Framework for CRM (Michael, 2011)
Question 4: Mass Customization Define mass customization. How does this concept relate to customer satisfaction and customer
Questions
Question 1: CRM & CLV Not all customers have the same value to the organization. What does this mean in terms of managing CRM? How is this related to the concept of Customer Lifetime Value? To begin with, customers and organizations perceive value in different ways and since not all customers are the same they perceived value in different ways. Customers perceive …show more content…
One of the main reasons, customers are the main source of competitive advantage and revenue generator. (Woodruff, 1997) Additionally, customer value is based on the level of involvement a customer makes in the decision process. Specifically, how personally important or interested that customer is in obtaining a product and how the experience the customer received on an emotional level while interacting with the organization and its product and/or services.
To explain the different levels of customer value to organizations, there is a low level customer that searches different companies looking for the product they want, comparing them, then deciding to purchase with no bond to any particular company. (Smith, 2014)
Next, there are high level customers that create a higher risk for organizations for the reason that the customer’s experience creates the value to the customer. That is to say, the customer’s interactions with the company and the emotional appeal of the relationship with the company, its products, and services. (Woodruff, 1997; Souca, 2014; Souca, …show more content…
Figure 1. Impact Customer Relationship Management has on Customer Satisfaction and Customer Loyalty. (Aimin & Shunxi, 2011)
Question 3: Value Chain What do we mean by the value chain? Why is this an important concept in CRM? According to Porter, (1985) the value chain concept is a means of identifying each of the business actions or stages that transformed inputs into outputs. (Michael, 2011)
CRM is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers for profit. (Martin, 2015) CRM builds the communication channel of value delivery between the organization and the customer making it more effective. (Michael, 2011)
Figure 2. Classification Framework for CRM (Michael, 2011)
Question 4: Mass Customization Define mass customization. How does this concept relate to customer satisfaction and customer