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Concepts of Customer Value

In: Customer Relationship Management

Author

Listed:
  • V. Kumar

    (Georgia State University)

  • Werner Reinartz

    (University of Cologne)

Abstract

In light of the digital transformation relationship marketing as the heart of strategic CRM has gained substantial traction as markets get increasingly competitive and customers get increasingly demanding. In order to stay relevant, companies must create value for the customers while at the same time extracting enough value from them. Strategically implemented CRM is a key component to meet this challenge by balancing Customer Perceived Value and Company Value. Using a customer-value based approach to CRM, profits for the company as well as the satisfaction of their customers can be increased in the long run. Subsequently, the underlying processes are illustrated using the Satisfaction-Loyalty-Profit Chain (SPC). We explain why delivering value to the customers in the end translates to value for the firm. Moreover, we describe the different dimensions of value that a company can derive from customers and we consider various links within the SPC. Finally, using empirical studies this chapter shows that these links are not always linear and symmetric, and vary across industries and customer segments.

Suggested Citation

  • V. Kumar & Werner Reinartz, 2018. "Concepts of Customer Value," Springer Texts in Business and Economics, in: Customer Relationship Management, edition 3, chapter 2, pages 17-29, Springer.
    • Handle: RePEc:spr:sptchp:978-3-662-55381-7_2
    DOI: 10.1007/978-3-662-55381-7_2
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    Cited by:

    1. Matsuoka, Kohsuke, 2022. "Effects of revenue management on perceived value, customer satisfaction, and customer loyalty," Journal of Business Research, Elsevier, vol. 148(C), pages 131-148.
    2. Itani, Omar S. & Jaramillo, Fernando & Paesbrugghe, Bert, 2020. "Between a rock and a hard place: Seizing the opportunity of demanding customers by means of frontline service behaviors," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).

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