Customer Value Maximization

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.[1] 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 interactions with brands have become more layered/complex due to electronic channels of communication - Digital, Mobile, and Social-Internet.
  • Hyper competition and multiplicity of messages have severely impaired customer attention
  • Analytics and technology can be applied to address consumer behavior challenges
  • Marketing is forced to demonstrate accountability
  • Lack of human interaction with customers leads to inability to "close the sale"

These factors have made it imperative for marketing organizations to find new mechanisms to generate value from each customer interaction.[]

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.[2]

Marketing scenario

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.[3]

Marketing challenges

Marketing challenges can be predominantly dissected into 4 categories:

  • Lifecycle challenges include driving usage of a product/service, new client acquisition, enabling cross-sell, up-sell, client retention, activation, usage, preventing churn etc.[4]
  • Segment-based challenges Companies have the need to reach out to each customer in a different way suiting their needs and this is all the more the case when the company has multiple products/product variants. They need to reach out in a focused manner to independent segments that require varying strategies.[5]
  • Channel-based challenges Most companies adopt a multi-channel strategy in order to take their products or services to their customers. Each channel- be it a store, online, mobile etc. needs to be tackled in a different way to ensure maximization of results. In addition to this channel, cannibalization should also not happen.[6]
  • Function-based challenges When companies invest in marketing programs they look for methods that help them evaluate and track how it works and to measure ROI. Systems to manage their programs, maximize results and optimize spends are all that companies keep looking for.[7]

What organizations need from their marketing programs

The intended outcome of marketing investments may be

The actual outcomes, however, happen to be

  • Traffic to website
  • Conversations on social media
  • Views of online videos
  • Calls to 1800 numbers
  • Walk-ins to physical outlets


  • Takes customer view of all marketing programs and integrates them to deliver value.
  • Brings accountability to marketing programs.
  • Helps map marketing goals to business goals.
  • Helps identify the right marketing channel and tool mix.
  • Small interventions in marketing programs to create significant change.


  • X-ray marketing programs.
  • Evaluate their effectiveness.
  • Re-architect them according to goals.
  • Augment Measurement System.
  • Grow value[8]

When this becomes critical

  • Whenever the marketing team needs to demonstrate the accountability of spends or measurability of returns.[]
  • Increase yield from current customer-facing programs, channels or product lines.[]
  • Align and optimize customer engagement on digital, 1-1 and social media to overarching brand and business objectives.[]

Versus CRM

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.[]

See also


  1. ^ Superior customer value/ Buch. CRC. 2012. ISBN 9781439861288. OCLC 799019107.
  2. ^ Art., Weinstein,; Art., Weinstein, (2004). Superior customer value in the new economy concepts and cases. CRC Press. ISBN 0203501497. OCLC 300310255.
  3. ^ "Financial Marketers Not Ready For The Future". The Financial Brand. 2017-04-24. Retrieved .
  4. ^ "Exploit the Product Life Cycle". Harvard Business Review. Retrieved .
  5. ^ "Market Segmentation in B2B Markets | B2B Segmentation". B2B International. Retrieved .
  6. ^ Kolowich, Lindsay. "7 of the Top Marketing Challenges Marketers Face Today [New Data]". Retrieved .
  7. ^ "7 Big Problems in the Marketing Industry". Retrieved .
  8. ^ Anna, Fiorentino (December 2010). "Driving Intelligent Growth with Customer Value Maximization".

  This article uses material from the Wikipedia page available here. It is released under the Creative Commons Attribution-Share-Alike License 3.0.



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