CUSTOMER VALUE MANAGEMENT

[attachment=18293]

ABSTRACT

The topic as the name suggests is about identifying the value associated with acquiring customers and retaining them over a period of time. It also includes adoption of strategies to develop new customers and deriving the maximum utility from them. Well the reason behind selecting this topic is that in today’s competitive market, customer loyalty is one of the centre point through which you can take over from your competitors, so you need to be aware of the components associated with the customers and knowledge of such components will be of a great help to any organization as it ensures that wants and desires of customers are given the utmost consideration and ultimately adoption of such practice will help you increase the organization value with the help of serving customers well.



INTRODUCTION: -
Customer value management is an tool which does guarantee you a success but provided it is implemented at the right place, at the right time and at the right people. Major objective of CVM is to extract the maximum value out of your customers and retaining that value over a period of time and in his project I have discussed the ways through which one can retain one’s customer

IMPORTANCE: -
Importance of customer value management can be known from the fact that 80% of revenue for any organization comes from 20% of its loyal customers. Customers are considered as the king pin of any business, so efforts are being initiated by organization addressing these facts. Customers are considered as the critical assets for any company so taking care of customers assumes important. Since it has already been mentioned that major chunk of revenue to any organization comes from its loyal customers so organization needs to take care of their employees.

NEED: -
An US market survey from BEN RICKWORTH’s company indicated that 5% increase in customer retention results in 25-95% increase in profits. So understanding the value factor related to customers becomes the need for any organization whose objective is to sustain in the market for a longer period. Companies need to understand that loyal customers are the scarce resources for any organization and understanding the value they bring to any organization is crucial to the management.



RESEARCH METHODOLOGY

The methodology used by me is mainly of secondary nature; however primary data has been given its due importance. Primary research on customer’s value and client importance was done by me on two companies namely “AGARWAL STEEL STRUCTURES INDIA PVT (LTD.) and ICOM TELE LTD. These two companies are into power manufacturing sector and their primary products include steel, iron scraps and sponge. Talking to their management head I came to the conclusion that the companies which are into B2B business gives utmost importance to their clients and their customers as they depend on them for getting the orders. They want to get the maximum utility from their limited clients and in the meantime they also look for developing the customer base.


LITERATURE REVIEW

This study would be of a great help to marketers as it will help them in determining the intangible aspects of customers and how the value derived from the customers can be measured. If a company is not able to measure the value that the customers brings into the organization then it would defiantly will fail in its quest for retaining that value and develop it.
SERVE_QUAL model developed by Persuraman who is lecturer in MIAMI University can be of a great help to an organization to measure the value related to customers. It basically discusses the 5 Service Quality Gap Models which is written as follows.
1. Market Information Gap
2. Service Standard Gap
3. Service Information Gap
4. Internal communication Gap
5. Service Quality Gap