Database Reference
In-Depth Information
Customer Relationship Management
Information
is
Relationship
Customer
Centricity
Customer
Responsiveness
Customer Loyalty
Customer Relationship
Customer Life Cycle (CLC)
Customer Lifetime Value (LTV)
Customer Value Management (CVM)
Customer as Asset
Figure 1.1
the customer relationship framework.
Whereas this view may lead to increased services and incentives for customers that provide the
greatest returns to the company, on the other hand, it may also result in reduced services or even
strong disincentives for nonprofitable customers. If a company or organization was to put more of
its efforts into its existing customers, it would make sense that it did this with customers that had
the greatest potential. This means that at some point, it has to start to lose those customers that
are not ones that offer long-term future value—this might be because of transaction spend, the
value of a customer, or the cost of transacting or dealing with that customer or customer group.
All customers aren't created equal! Consequently, the traditional customer-centric slogan should
be transformed to
Valuable (i.e., Profitable) customers are always right.
Thus, even customers compete for bestowing their custom! Customer retention is extremely
important for companies because it is more efficient and effective to retain a current customer
than gain a new one. Companies can generate additional revenue and profits without incurring
the costs for acquiring new customers. In light of this, the management is really concerned with
having the right product in the right place, at the right price, at the right time, in the right condi-
tion
for the right customer
.
