The idea of value-based operations has been around for longer than most people think, but it wasn’t until Phil Kolter wrote “Customer Value Management” in 2017 that businesses as a whole began shifting to this concept. Even today, managers and executives across industries are still unsure if this approach is the best path forward for their brand.
If you’re on the fence about shifting your model, then learning all you can about a customer value management platform is the best course of action. This article is here to help you understand the value that this approach offers to your business.
What is Customer Value Management?
Customer value management, or CVM, is all about optimizing the value of your consumer base. It’s an expansion of relationship management, focusing on how your company handles the interactions with your current clientele and potential customers. This approach also focuses on long-term relationships, building customer retention.
The key here is the word value, as CVM requires understanding what your customers value or what they feel is important. That can vary greatly depending on your customer segment and demographic, but it all relates to the buying experience. This method focuses on why your customers prefer certain products, price points, the benefits they feel they receive from products, customer service experiences, and their level of trust with your brand.
Data and analytics are the only aids in approaching a CVM model without adding cost to you. This is where customer value management platforms come in as vital tools to help you better understand your consumers. These tools allow you to better understand the following four critical categories:
- Firmographics data – name, location, contact, industry, etc.
- Transaction data – recent purchases, frequency of purchases, products bought, quantity of products, pricing information, etc.
- Interaction and engagement data – behavioral data including channels, service tickets, content consumed, products viewed, etc.
- Financial data – lifetime value, profitability, rate of consumption, cost to acquire, etc.
This data allows you to better understand what your customers value in your business’ offerings, allowing you to identify what’s working and what you could improve in relation to sales. These valuable insights deliver a unique competitive advantage.
While your competitors might still be on the edge of adopting a CVM model, you can soar ahead with the right platform tool. Adopting CVM now gives you strategic insight into your customers’ buying habits as well as their minds, allowing you to optimize your sales and marketing strategies to create lifelong consumers.
The more time you invest into CVM, the better your strategies for providing superior customer value become. This allows you to focus on providing excellence in all aspects of the customer experience, building a consumer-centric culture within your organization that benefits everyone involved.
If you’re still wondering what value CVM has to offer your business, then the answer is clear. By understanding the consumer and meeting their needs by delivering value, you’re creating the secret for success that boosts your bottom line as well as your brand’s reputation.