Research On Customer Value Management

Customer value management (CVM) is a management process in which a company persists with creating superior customer value for targeted customers to constantly attract, develop and retain profitable customers and makes them creating maximum value for the company. To speaking simply, CVM means creating superior customer value for targeted customers and making them creating maximum value in return.CVM aims at maximizing customer's potential value, but which has to be based on two preconditions that superior customer value is the premise of superior financial performance and that profitable customers are important assets of a company. This dissertation intends to form an integrated theoretic framework of CVM and discuss how to create superior customer value and develop customers'potential value to full extent to increase customer-based ROI.This dissertation takes customer value analysis and the model of lifecycle of customer value as its bases. Centered on maximizing customer's lifetime value, this dissertation applies customer value matrix analysis and the model of lifecycle of customer value through the whole process of CVM. It also proposes some math formulas as bases for discussion. The contents and process of CVM are integrated in discussion, and value networks are researched as an important component of CVM. This dissertation doesn't analyze business processes because it centers on forming a framework of CVM.This dissertation comprises five chapters.Chapter 1 is an introduction. It aims at giving a summary of related research on customer value and CVM and putting forward a theoretic framework of CVM.This chapter first inquires into the means of customer value and explores the relation between customer value and corporate performance. The means of customer value is explored from two perspectives. One is customer's perception of value in the corporate offer, which is widely called customer perceived value (CPV); another is customer's value to a company. The analysis from the former perspective shows that CPV is related to utility of offer, process, relationship and duration, and it also involves customer's cognition such as trade-off. The analysis from the latter sum up and classify all kinds of customer's value to company. The relationship between customer value and corporate performance is related to such elements as the influence of customer value on customer behavior and the influence of customer behavior on corporate performance. It can be inferred that customers of value are valuable assets of a company from the exploration of the relationship between customer value and corporate performance.This chapter then summarizes the research on CVM and analyzes the agreement, disagreement and deficiency of the research so far. The agreement of the research includes the ideas that superior customer value is the source of competitive advantage, and that customer value analysis is important, and that maximizing customer's potential value is one of goal of CVM, and that customer value should direct the decisions on the capabilities and infrastructural investment. However, there are many disagreements in the research yet, such as different methods in customer value analysis, disagreement in the notions on capabilities and processes, and different process of CVM.Although fruitful production has been obtained from research on CVM, there exist many deficiencies. CVM has not absorbed the outcome from research on customer's value to a company. Academics have not explored how customer value will change with the evolution of customer relationship. The research on the process of CVM has not incorporated the research on how to get return on customer value creation. That is, the present research just center on customer value creation and doesn't consider getting customer's value. It also doesn't include research on members of a company's value chain that are indispensable to customer value creation and just centers on inner business processes. With the rapid development of globalization of economy and division within labor, the capabilities of customer value creation of members of value chains and cooperation of these members have become decisive elements making for superior customer value creation.Finally, incorporating fruit of research on CVM and considering the deficiencies in these researches, this chapter forms an integrated theory framework of CVM and explains innovations and the structure of this dissertation. This integrated framework centers on maximizing customer lifetime value. It introduces a CVM process to create customer value, develop and extract customer's value. It also forms and manages a value network to create competitive advantage.Chapter 2 explains the theory foundation and methodology of CVM research made in this dissertation. This dissertation applies transaction cost theory, relationship marketing theory, strategic management theory, network organization theory and consumer behavior theory in CVM research. Related methodologies include a methodology of dynamical research combined with static research, a methodology of qualitative research combined with quantitative research, and a methodology of research from customer's perspective combined with that from a company's perspective.Chapter 3 analyzes customer value, and customer value analysis (CVA) is the foundation of CVM. CVA includes analyzing company's value to customer and analyzing customer's value to a company. The former points to customer's expectation for the corporate offer and the degree of satisfaction from using it. It is called customer perceived value (CPV). A company can understand customer need, customer's value for it and their dynamical evolution, which will provide the foundation of decision and execution of CVM.At first, this chapter analyzes customer value. On the one hand, it introduces and explains CPV matrix, and analyzes component elements of CPV, forms a CPV formulas. This elaborates customer value from customer's perspective. On the other hand, it analyzes value of customer (VC) for company from corporate perspective, introduces and explains VC matrix, analyzes the component elements of VC, and forms VC formulas.Then, this chapter summarizes and utilizes the results of research on customer relationship lifecycle, and applies the CPV matrix and VC matrix to form a model of customer value lifecycle. In this model, it analyzes the evolution rule of customer value, and concludes that CVM should be performed according to the evolution of customer value lifecyle. This dissertation divides customer value lifecycle into 7 sequential stages of awareness, exploration, expansion, maturation, weakening and dissolution. Based on these 7 stages, this dissertation analyzes the evolution of CPV, customer expected value, customer's value for a company, and the relationship between them. In addition, it explores the feasibility of the model of customer value lifecycle from customer relationship value for customer, universality of relationship characteristic of transaction, necessity and feasibility of considering customer relationship.Finally, this chapter proposes a impetus triangle of customer value to explain the formation mechanism of customer value. Three contents of CVM are drawn from this triangle when combined with the model of customer value lifecycle. They are creation of superior CPV, development and appropriation of maximum customer's potential value, and establishment and management of value networks.Chapter 4 analyzes CVM process. It forms CVM process based on customer value matrices and customer value lifecycle and customer value formulas. The contents of CVM will be explained in elaboration of CVM process. CVM process includes four sequential and circular steps-choosing value, creating value, appropriating value and examining value. Of these four steps, examining value is made from corporate perspective, and the other 3 steps are done from the perspectives of customer and company at the same time. This CVM process aims at maximizing customer's potential value for company while persisting in creating superior CPV.Choosing value is equivalent to the strategic marketing process of STP in marketing management. It first segments markets based on the analysis of customer's value for company and make deep inquiry into CPV and customer expected value of partitioned markets. And then, it chooses the goal markets according to corporate goal and capability of value creation. Finally, it finds a value position of a company in the goal markets and proposes its competitive value proposition.Creating value aims at maximizing customer's value for company while maximizing CPV, so it includes contents of two aspects-creating superior CPV and developing customer's potential value to full extent. This dissertation has concluded that CPV is the sum of the weighted value of historical CPV and present CPV and future CPV while explaining CPV matrix in chapter 3. That is, CPV is a process of experience and learning. Therefore, this dissertation centers on management of process of customer's experience and learning, emphasizes on realizing and applying the development logic of CPV to create it, and pushes and retains customer value lifecycle to advanced stages. It centers on maximizing customer lifetime value to discuss full developing customer's potential value. This is made from four aspects of managing relationship stages to advance customer relationship, enhancing the degree of customer's loyalty to improve customer retention rate, expanding pervasion of customer relationship, and augmenting levels of communication with customers to fully develop customer's learning value.Appropriating value is how to get return for when creating value. This dissertation discusses appropriating value from the period structure of return and the nature of return because value creation involves periods and the nature of customer's input. Its specific task is to decide tactics of appropriating value based on analysis of customer's consumption scenarios and company's business scenarios.The tasks of examining value include systematically examining the results of value creation and value appropriation, ascertaining whether the goal of value creation and value appropriation are reached, and getting useful information. With value examination, a company can begin a new round of CVM and constantly improve the process of CVM, thus it can create better value for both customers and itself. The objects of examining value involve customer perceived (expected) value, the development of customer's value for company, and appropriation of value. This dissertation incorporates competitors'customers into objects of value examination to check the gap of CVM between company and its competitors. Particularly, this dissertation emphasizes examining the evolution of customer value lifecycle. In this chapter, it gives a series of methodologies and indices of value examination.Chapter 5 discusses how to establish and manage a value networks that can create competitive advantage for a company. Such a network can provide unique value for value creation of a company, which include creating particular value for customers and providing a company with competitive advantage on the aspects of price, cost, time and resources. Value network is one of important contents of CVM, and it involves choosing its members, managing and measuring it. This dissertation forms a partner value matrix to analyze its value for a company and direct estimate and choice of partners. A balanced system of examination is created to examine the performance of a value network. It examines the performance of a value network from four facets of CPV, operation and marketing, strategy, and development of customer's value for a company. This system is designed to improve on a value network.