by dr. horst-florian jaeck and dr. denise muschik
What is the value of customer relations?
customer relations in times of digitalization
Customer acquisition and customer relationship management often cost companies more than they earn them. How can companies make the best possible decision as to which customers are truly worth higher expenditure? Data-driven customer value analysis from rpc – The Retail Performance Company delivers the answers. It shows the current and future value of a customer relationship. This allows decisions on customer retention and acquisition to be made in a way that maximizes value.
rpc determines the value of a customer not only on the basis of their purchase history and evaluations but in particular by looking at their future business potential and the status of the respective customer relationship. This assessment goes beyond mere monetary considerations: Qualitative aspects are taken into account alongside hard facts, particularly when it comes to the positive reference impact of “multiplier customers.”
“This three-dimensional approach allows companies to obtain a comprehensive and precise overview of their customers,” explains Dr. Horst-Florian Jaeck, a partner at rpc. The results of the analysis provide sales, marketing and service departments with a powerful tool for anticipating customer wishes even more accurately and quickly in the future, proactively managing customer relationships and making the right decisions about budgets and resources. “Digitalization is seeing the arrival of new market participants, falling customer retention and rapidly changing customer expectations. In the future, however, customer loyalty will depend on the feeling of being understood. The better a company knows its customers and the more individually it can address them, the more valuable the customer relationship will be,” Jaeck adds.
why customer evaluation pays off
Customer value is a hidden treasure that companies should seek to unearth. The basis for successful customer value management is a powerful data analytics system architecture and a high-quality data pool. In other words, intelligent customer value management does not only gather randomly collected knowledge about customers that is more or less qualified—it is the key to constantly improving the understanding customers, their personal preferences and their expectations of the company. This is particularly beneficial in sectors with long-term customer relationships, such as financial services or the automotive industry.
Customer value management is a valuable addition to every sustainable company strategy, as it allows products and services to be continuously adjusted and optimized to reflect customers’ current and future needs. In particular, customer-value–oriented company management has the following effects:
It secures and increases customer loyalty because products and services can be adapted specifically to customers’ individual requirements and situations, thereby generating significant value added for them. Customers who already use multiple products or services from a product based on this highly targeted approach are not only more satisfied but also more loyal to the company than customers who have only a few product relationships with a provider.
It increases customer profitability, as it makes it more likely that a company can offer customers exactly what they need in terms of additional products or services.
It ensures profitable growth through the targeted acquisition of new customers. The company expands into (more) valuable customer groups in a targeted manner and can better focus its marketing and sales expenditure on its customers’ preferred sales channels.
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