5 core CVM processe

Several theoretical frameworks are used to cover all possible areas of Customer Value Management. Originally this? framework was created by Adrian Payne and was found by myself in the book “The handbook of CRM”. There are five core customer value processes used in customer strategy.

First is a strategy designing process.? According to “Playing to Win”? a book written by Roger Martin? while creating the business strategy of the company you should answer a cascade of the following strategic questions.? Firstly, what is our winning aspiration?? Secondly, where do we play ? Answers should? include geographic territory, customer segments, value delivery channels,? customer pains and problems? that are going to be solved. The third question to be answered is how are we going to win?? As a result? usually? there are two possible answers: cost leadership or differentiation. The fourth question is what capabilities are needed? Including labour, expertise, technology? funding and other? possible capabilities.? Finally, we should answer, what kind of management system is needed. For instance we use Agile, some companies might use another.?

In relation to the customer strategy, we are answering the questions:? what is the target segment of the company, what are those customer gains, problems we are going to solve. An additional significant task of customer strategy is to figure out the scale of the segment and size of the problem. Two indicators are used to calculate the scale of the pain, The Number of customers in the market and? monetary amount of? the? needs or pain. Furthermore, customer strategy answers a few more questions: how are we going to acquire new customers, how to grow the existing customer base and how to keep customers? and gain loyalty.??

The second process is value creation.? From the customer management? point of view the client? value proposition? should be clarified.? It includes not only product value propositions, but? also customer context, and the? best channel .? Undoubtedly? modern businesses exist to solve customer problems and pains, but companies cannot survive in the long? run without profit.? Similar to customer value design, it is necessary to pay attention to business design.? Designing business approaches? consists of three main? steps: creating, delivering? and capturing value.? The process of business creation needs cross functional? engagement of people at least from marketing, finance, operations, IT and other key segments.?

Thirdly,? it is a process of connected experience creation.??In the original terminology this idea was called ‘the process of channel integration’ however this approach has become slightly outdated. I would now call it ‘integration for effortless customer experience’. Even now in the age of total digitalization that is ? driven by the pandemic in many businesses (the high rate of change is directly related to the pandemic), mobile applications are becoming the main channel for customer interaction.? The Connected strategy approach for CRM was developed by Professor Nicolaj Siggelkow and Christian Terwiesch. The four R’s of connected customer experience strategy are:?

1. RECOGNIZE the need of a customer
2. Translate? this information into a REQUEST?
3. RESPOND to the customer's need, problem or desire request
4. 4-th R? is “REPEAT”? to encourage your customers to buy? or have repeated use of a product or service. ? The Term “stickiness” is often? used in business mobile applications. Stickiness is a term that is often used as a metric of the repeat use

The Fourth bundle of? processes is? ‘efficiency management’.?During the campaign management process (when) or? testing business ideas we need to challenge the status quo regularly. Efficiency management is a process of innovation through conducting experiments g and gaining and? using insights. The data -baked? approaches for insights and campaigns generation is used.? Tests? should be regularly performed with different products or/and? channel mixes. A/B tests for content should be used also.? If something does not? work or the conversion rate is low we have to drill down? and generate new hypotheses.? In business experiments three types of tests are used:?

• First, guerilla tests, short interviews of quick prototype testing;
• Second, indicative tests on a small number of customers to assess the? customer? demand, the potencial price mix and the value delivery model;
• Finally, high fidelity tests or pilot projects during a certain time or on a limited but statistically representative group of customers.??

Finally,? probably one of the most important processes is data and information? management.? It answers the question of our capabilities, and connects to the processes of data mining, storing, analysing and transforming into business value.? For example, mining and analysing data about customer behaviour in the mobile? application of your firm could be started and tonnes of new insight? can be found and? new questions and ideas might be enabled (be generated) . The process of data? (or insight)? mining and? information management is the core of data? driven design making culture.?

In conclusion, we should incorporate all five processes to CVM? targeting to create and maintain superior? customer value and? increase customer? equity.

Link for the book with original framework: https://www.amazon.com/Handbook-CRM-Excellence-Management-Butterworth-Heinemann/dp/B00EKYDZ86

Connected Strategy book: https://connected-strategy.com/