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Customer value maximization (CVM) is a real-time service model that, proponents say, goes beyond basic customer relationship management (CRM) capabilities, identifying and capturing maximum potential from prospects and existing customers. Proponents claim that a well-devised CVM program helps companies offer the right things to the right people at the right time. The CVM framework uses creative, technology, media and process along with robust measurement systems to help marketers maximize returns from their marketing investments.
Customer value maximization shifts focus from managing products or marketing campaigns to managing the profitability of individual customers over the life of the relationship. While CVM may lead to better product offerings and more targeted campaigns, a customer value manager asks different questions compared to a traditional marketing manager. Instead of asking who will respond to a 10% off promotion, a customer value manager strives to understand who the customer is and what they can offer to increase the customer's lifetime value?
The CVM framework evaluates current methods and effectiveness, makes changes where required, and sets up a measurement system that helps in evaluating effectiveness. The CVM framework operates as a continuous process in a closed loop.
Today customers own the on and off switches to all media/mediums, are more knowledgeable about various products and services they are being marketed to and have very limited attention spans owing to existing clutter. The remote, so to speak, is now unmistakably in the customers' hands. Most marketers have realized that traditional methods of marketing simply don't work in this new milieu. They are today actively seeking, investing and mastering newer methods and tools that go beyond making their brands merely visible to ones that allow better consumer understanding, precise targeting, customized offering and above all that which engage and let them have a two-way conversation with their customers. For the progressive marketer, the real challenge begins from this stage.
Marketing challenges can be predominantly dissected into 4 categories:
The intended outcome of marketing investments may be
The actual outcomes, however, happen to be
Customer relationship management facilitates deepening of relationships with existing customers using database marketing techniques. Customer value maximization, on the other hand, is used to maximize value for both existing and prospective customers and follows a multi-disciplinary approach. Customer value maximization may or may not require relationship marketing.
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