Definition of Customer Value Management

In the FYE 2011, SingTel boasted a 0.8% increase in profits utilising Six-Sigma, undertaken by expensive global marketing consultants, In contrast, an leading Asian Bank grew its profits by 22.0% using CVM with a frugal budgets for one of Launch Engineering's consultants.

Customer Value Management Promises Huge Profits

Customer Profitability (CP) is the value to an organisation of its customer. Measuring Customer Profitability, and using these measures properly, is called Customer Value Management (CVM).

Perhaps Customer Value Management should really be called ‘customer worth identification” or “customer worth analysis” as it helps management identify where real business profits are derived.

Customer Value Management: Sophisticated Customer Profitability Analysis

So called experts rely on the Pareto theory, an estimate that suggest 80% of your business comes from 20% of your clients... CVM goes a whole universe better!

Customer Value Management identifies exactly what proportions of your business comes from what proportion of your customers, but also identifies them and segments your customer data base so you can make better decisions across your marketing mix!

Why is Customer Value Management so much more sophisticated than simple CP?

This proprietary Customer Profitability market research tool uses data mining of internal customer behaviours, cross-referenced to market research findings, to identify the key factors that dominate the destiny of any large business… CVM identifies the customers that generate the most value (as a proxy for profit), as well as customers where the firm actually loses money.

While banking, insurance and Telco’s simply cannot optimise profit without this ability, ALL business can prosper with Customer Profitability customer segmentation and analysis.

This is the most refined, efficient, reliable and succinct way to achieve the following four goals:

Reduced Customer Attrition: Stop losing good customers. If you can accurately identify WHO your profitable customers are, you can micro-manage valuable accounts, or groups, niches, or segments, to better meet their needs, impress them and build relationships and loyalty.

Expand Growth: Improve sales & profits. No longer does sales growth have to be amortised over the long term… if you can identify the target customer in the most profitable segments and rationalise in the unprofitable ones: Your marketing strategies become self funding and your profits grow as well.

Reduce Costs: Decrease your cost per customer - across the board. In identifying low value customers, customers that are not worth very much to your business, or actually cost you money, you’ll build products to better manage them, you’ll spend promotional effort in the ‘right’ places, you’ll divest yourself of non-profitable activity and you’ll position yourself for long-term sustainable competitive advantage while leaving competitors to the loss-leading remains of the market.

Customer Value based Strategy Development

Think about crafting strategies and designing marketing that exploits insights from customer information... A unique, integrated, very versatile and practical approach to Customer Strategy development, our proprietary Customer Value Management (CVM) segmentation & customer management approach will assist with Acquisition of New Customers, Customer Management, Expansion of Existing Customers and Retention of Valued Customers.

This Customer Based approach assists in developing customer oriented Value Propositions to maximise effectiveness and results.

Already used effectively by large Asian Banks, the Customer Value Management Framework and Customer Based Design approach will drive practical and meaningful business initiatives and outcomes.