Customer Relationship Value Research Articles

Customer Relationship Value Evaluation Method for E-commerce Platform Based on Fuzzy Clustering

Customer Relationship Value Evaluation Method for E-commerce Platform Based on Fuzzy Clustering

Enterprise Financial Asset Risk Measurement Based on Embedded Microprocessor Security Analysis

As the volatility of financial markets continues to increase, the risk structure involved in financial derivatives has become more and more complex. The harmful effects of financial risks can put the company in trouble. Only by understanding the correlation between financial assets can we more accurately measure the risk of a company’s financial assets. This article is aimed at studying the company’s financial asset risk measurement method based on integrated microprocessor security analysis, so that enterprises can effectively manage the risk of financial assets. This paper randomly selects 10 variables related to demographic characteristics, customer needs, and consumption characteristics of 850 customers from the historical customer data of a bank that has been abandoned for customer market segmentation research. Based on the theoretical basis of customer value evaluation, the factor analysis method refers to a multivariate statistical analysis method that starts from the internal dependence relationship of the research index correlation matrix and reduces some variables with overlapping information and intricate relationships into a few unrelated comprehensive factors. The basic idea is to group variables according to the size of the correlation, so that the correlation between the variables in the same group is higher, but the variables of different groups are not correlated or correlated, and each group of variables represents a basic structure—the common factor. This paper uses the factor analysis model in statistical principles to analyze the main factors affecting the pricing of deposit products, and we can obtain three quantitative common factors: customers related to the customer’s willingness to pay demand value, customer loyalty factor, and customer cost factor. Then, the variance contribution rate of the three factors to all observable variables is weighted and converted into the net customer relationship value, at the same time, the embedded microprocessor evolved from the CPU in the general-purpose computer. Its characteristic is that it has a 32-bit or more processor and has high performance. In actual embedded applications, it only retains closeness to embedded applications. Related functional hardware, removing other redundant functional parts so that the special requirements of embedded applications can be realized with the lowest power consumption and resources. Before constructing the structural equation model, it is necessary to test the reliability and validity of the sample data. The data selected in this paper are panel data. In order to judge whether the data is stable, the panel unit root test should be carried out. This article chooses LLC to verify the stability of the panel data. Individual fixed effects and linear time trends are added to the test, and the lag order of the difference lag is 0. Among the intermediary business income of joint-stock commercial banks, bank card fee income accounts for the largest proportion, with China Everbright Bank accounting for 70.12% and China CITIC Bank accounting for 54.16%. The research results show that with the continuous increase of Internet penetration rate, the impact of corporate finance on commercial banks shows phased characteristics. The corporate financial risk measurement method studied in this paper can provide effective help for risk monitoring and early warning. Risk measurement is a management activity that uses certain methods to determine and quantify the possibility of a company’s future financial results deviating from expected financial goals due to various uncertain factors. In practice, it is generally analyzed by a combination of qualitative and quantitative, subjective, and objective methods.

The value of mobile ticketing from a public transport perspective

Within the field of mobile payments, the market segment for mobile ticketing services is expected to grow, driven by the public transport sector. Although a large number of studies have explored the value of mobile payments to customers (ie service end users), there is a lack of research exploring the value of mobile payment and mobile ticketing for business customers (ie transport companies and retailers). This paper aims to address this gap and to explore the kinds of value that mobile ticketing services create for public transport companies. The research considers mobile ticketing services in six Northern European countries. The research findings suggest that within the business-to-business context, mobile ticketing services create multiple dimensions of value, namely enhanced technical functionality; financial value; better working environment; operational value; and reputational and customer relationship value. For passengers, meanwhile, value takes the form of convenience and service enhancement. These benefits are factors driving adoption of mobile ticketing and mobile payment services by public transport companies.

PENGUKURAN KINERJA CUSTOMER RELATIONSHIP MANAGEMENT (CRM) MENGGUNAKAN CRM SCORECARD DAN OMAX

UMKM Batik Tulis Lasem is one of the superior products from Rembang that continue to be developed by the government. UMKM Batik Tulis Lasem still many difficulties on their progression, especially in marketing, others are the utilization of technology, lack of innovation, capital and low quality of human resources. Another obstacle that is often faced by UMKM who are members of the Koperasi Batik Tulis Lasem are marketing and maintain the existing market. In addition, owners who are members of Koperasi Batik Tulis Lasem also pay less attention to marketing strategy and maintaining customer relationship. Measuring the performance of UMKM Batik Tulis Lasem by identifying KPI (Key Performance Indicator) measure the practice performance of Customer Relationship Management (CRM using CRM Scorecard) through four CRM perspectives. The assessment of each perspective uses the AHP (Analytical Hierarchy Prosses) method and scoring of performance on each level or CRM factors using the OMAX (Objective Matrix) method.Through CRM scorecard describes a performance measurement of the implementation of Customer Relationship Management (CRM) in Koperasi Batik Tulis Lasem so that the results of these measurements show some perspectives that need to be improved efficiency and performance of an organization. From the perspective of performance organizations have two factors, six factors from the perspective of consumer, three factors from the perspective of process, seven factors from the perspective of infrastructure. Four perspective that affect the performance of CRM generally can be known Good Performance of Koperasi Batik Tulis. There are only three criteria that are at the bad level. They are improving participation of management, increase human resources capability and increasing customer relationship value. The results expected to increase customer satisfaction and loyalty in the Koperasi Batik Tulis Lasem . Key word: AHP, Batik Tulis, CRM, CRM scorecard, OMAX.

Customer Lifetime Value

This technical note introduces important metrics firms use to monitor customer relationships. An important summary of customer activity is the profit the firm receives from each customer. profit (CP) is the metric that summarizes the past financial performance of a customer relationship and is covered in a companion note, Customer Profit (UVA-M-0799). The central difference between CP and customer lifetime value (CLV) is that CP measures the past and CLV looks forward. This note addresses the forward-looking metric that attempts to put a dollar value on a customer relationship.This technical note is an excerpt of the more comprehensive treatment of customer metrics found in Customer Profitability (UVA-M-0718). Excerpt UVA-M-0800 Rev. Jun. 19, 2014 Customer Lifetime Value As Don Peppers and Martha Rogers are fond of saying, “Some customers are more equal than others.” One way to examine these differences is through customer profit (CP), the difference between the revenues and the costs associated with the customer relationship during a specified period. The central difference between CP and customer lifetime value (CLV) is that CP measures the past and CLV looks forward. As such, CLV can be more useful in shaping managers' decisions but is much more difficult to quantify. Quantifying CP is a matter of carefully reporting and summarizing the results of past activity, whereas quantifying CLV involves forecasting future activity. Customer Lifetime Value: The Present Value of the Future Cash Flows Attributed to the Relationship The concept of CLV is nothing more than the concept of present value applied to the cash flows of the customer relationship. The present value of any stream of future cash flows is designed to measure the single lump-sum value, today, of those future cash flows. CLV represents the single lump-sum value, today, of the customer relationship. Even more simply, CLV is the dollar value of the customer relationship to the firm. It is an upper bound on what the firm would be willing to pay to acquire the customer relationship as well as an upper bound on the amount the firm would be willing to pay to avoid losing the customer relationship. If we view a customer relationship as an asset of the firm, CLV would represent the dollar value of that asset. One way to project the value of future customer cash flows is to make the heroic assumption that the customers acquired several periods ago are no better or worse (in terms of their CLV) than the ones currently acquired. We then go back and collect data on a cohort of customers, all acquired at about the same time, and carefully reconstruct their cash flows over some finite number of periods. The next steps are to discount the cash flow for each customer back to the time of acquisition, to calculate the sample customers' CLVs, and then to average all sample CLVs together to produce an estimate of the CLV of each newly acquired customer. This method is referred to as the “cohort and incubate” approach. Equivalently, one can calculate the present value of the total cash flow from the cohort and divide by the number of customers to get the average CLV for the cohort. If the value of customer relationships is stable across time, the average CLV of the cohort sample is an appropriate estimator of the CLV of newly acquired customers. . . .

Organizational structure, innovation performance and customer relationship value in the Greek advertising and media industry

PurposeThis paper aims to explore the impact of organizational structure dimensions on innovation performance as well as its implications on business customers’ relationship value and financial performance in the business-to-business (B2B) market of the Greek advertising and media industry.Design/methodology/approachBased on a sample of 180 executives, who are at the helm of 163 Greek advertising and media organizations, the authors apply the partial least square method to test the association of organizational structure with innovation performance, business customers’ relationship value and financial outcomes.FindingsFindings have brought to light that training boosts organization’s capacity to innovate, whereas direct supervision as a coordination mechanism significantly restricts this capacity. Innovation performance in the advertising B2B market fosters business customers’ relationship value and financial performance, while financial outcomes are also beneficially affected by profitable relationships with customer relationship value.Practical implicationsBecause of the dramatic decline in their profitability caused by the economic crisis in the past five years, Greek advertising and media companies are threatened with extinction; thus, they are required to enhance their effectiveness through the adoption of a more innovation-oriented structure. Thus, managers should facilitate structures supporting training and delimiting direct supervision to foster the development of a competitive advantage built on innovation, creativity and business clients’ relationship.Originality/valueThis study contributes to the existing relationship marketing literature because it introduced Mintzberg’s typology to measure organizational structure and led to the diagnosis of the associations between different dimensions of organizational structure and various aspects of performance in the media and advertising industry, revealing the partial mediating role of customer relationship value between innovation and financial performance in the B2B market.

Impact of technology and equipment equity on price levels of products

The dynamics of contemporary economic processes urge researchers in the marketing field to study pricing outside of its traditional role. Modern customer-oriented approaches examine price levels as an instrument which contributes to retention and attraction of clients. Retention and expansion of client base is a subject-matter of the concept of customer equity which aims at long-term enhancement of customer relationship value. This value depends directly on the price levels defined by business organizations. Therefore, excessive application of discounts and sales may be risky for the company as it may turn its clients into “discount hunters” which will have detrimental impact on customer equity. In this regard, the current study aims to discover opportunities to enhance price competitiveness through promotion of customer perceived value. In pursuance of the objective of the present study, the drivers influencing the perceived value and particularly the technology and equipment equity were examined. As a result, the content of the factor was clarified and its positive impact on the level of customer perceived value was established. Guidelines were established for building technology and equipment equity, enhancement of the perceived value of products, and price competitiveness.

How Crm Performs Inside Sales Activities In Itc Companies: A Case Study Of Fincons Group, Italy

The aim of this paper is to take a case study of the Fincons Group and examine the in depth activity of the Inside Sales Department. The study presents Fincons Group, which is an IT Consulting Company. Its offices are based in Italy, Switzerland, and England. They are organized into Business Units and are offering concerns to all the different stages of IT applications as well as complex innovation programs. It explains the activities of the Inside Sales Department, specifically the Inside Sales. In detail, Marketing Analysis and Strategy, Marketing Management, and Marketing Research and Metrics have been considered useful to present to the management the guideline for the quantitative and qualitative analysis of customer relationship management programs. Thus, its aim is to optimize the sales process. This study also deals with CRM Salesforce, which is the IT tool used for customer relationship management. In this case, it is possible to analyse the CRM by going over its list of information. Thus, the aim is to give the guideline to quantify the value of customer relationships. In conclusion, the paper highlights the idea of “Holistic CRM”. Specifically, it emphasizes the need for a cross-functional, process-oriented, and calculated approach that positions CRM at a strategic level where business should take precedence over technology.

Relationship value based on customer equity influences on online group-buying customer loyalty

The purposes of this article is to clarify the composition of relationship value based on consumer equity and examine the mediating role of relationship quality and moderating role of customer relationship life cycle in the relationship between the relationship value and customer loyalty. This paper finds that different dimensions of relationship quality have different effects on customer loyalty by empirical analysis. Besides, relationship quality plays a mediator role in the relationship between relationship value and customer loyalty, and relationship life cycle in different stage have significant different moderation effects between customer relationship value and customer loyalty. This study outcomes indicate that establishing and maintaining good relationships with consumers can effectively improve customer loyalty, and then enhance customer equity, besides, customer participation behavior and positive word of mouth can improve customer loyalty. The findings are valuable for marketing managers of online group-buying.

Crisis-related shifts in the market valuation of banking activities

We examine changes in banks’ market-to-book ratios over the last decade, focusing on the dramatic and persistent declines witnessed during the financial crisis. The extent of the decline and its persistence cannot be explained by the delayed recognition of losses on existing financial instruments. Rather, it is declines in the values of intangibles – including customer relationships and other intangibles related to business opportunities – along with unrecognized contingent obligations that account for most of the persistent decline in market-to-book ratios. These shifts reflect a combination of changed economic circumstances (e.g., low interest rates reduce the value of core deposits; meager growth opportunities reduce the value of customer relationships) and changed regulatory policies. Together, these changes in the business environment since the financial crisis have led investors to associate little value with intangibles. For example, changing market perceptions of the consequences of leverage have affected the way investors value banks; prior to the crisis, higher leverage, ceteris paribus, was associated with greater value (reflecting the high relative cost of equity finance), but during and after the crisis, as default risk and regulatory concerns came to the fore, lower leverage was associated with greater value. Reflecting the rising importance of regulatory risks (e.g., the uncertain consequences of the Volcker Rule), after controlling for other influences, dividend payments (a signal of management and regulatory perceptions of the persistence of financial strength) matter for market prices much more after the crisis, while increases in recurring fee income matter less.

MOTIVATING CEOs TO FOCUS ON CUSTOMER SATISFACTION: IS LONG-TERM COMPENSATION THE ANSWER?

In recent years, the fi nancial value of customer relationships has received more attention from senior executives, who increasingly tend to see customer satisfaction as a valuable corporate intangible asset. Finding ways to encourage senior executives to build customer–fi rm relations and improve customer satisfaction, however, has been challenging. What incentives should fi rms employ to motivate CEOs to enhance customer satisfaction and thereby improve fi rm value? And what are the related mechanisms for doing so? A recent study by Xueming Luo (University of Texas at Arlington), Jan Wieseke (Ruhr-University Bochum), and Christian Homburg (University of Mannheim), helps answer those questions. Their study examines two routes of infl uence that fi rms can use when designing appropriate executive compensation structures aimed at raising fi rms’ customer satisfaction and market value. The fi rst route calls on external marketing to implement actions that build customer–fi rm relations. Luo and his colleagues conjecture that increasing the proportion of CEO long-term equity-based compensation will positively infl uence corporate engagement in long-term customer relationship management. Actions that build customer–fi rm relations should, in turn, improve customer satisfaction and ultimately raise fi rm value. Indeed, the “tone at the top”—often used to describe CEOs’ focus on fi nancial matters, such as quality fi nancial reporting and effective control systems—also applies to marketing efforts aimed at “knowing the customer,” including efforts to establish effective customer service departments that respond quickly to customer complaints. The second route of infl uence involves internal marketing, expecting that long-term equity-based CEO compensation will encourage actions to build employee–fi rm relations that positively affect customer satisfaction and fi rm value over time. Here the state of employee morale, internal communications (followed by actions that “walk the talk”), and performance-based salaries all contribute to employee attitudes toward the business and its customers. Both of these “marketing routes” use organizational actions to positively infl uence customer satisfaction—a key leverage point for raising sales, profi ts, and fi rm value. The external route specifi es direct fi rm efforts to improve customer satisfaction, while the internal route focuses on building those employee behaviors and attitudes that facilitate improved customer satisfaction. Furthermore, Luo and his colleagues proposed that the strength of the effects of CEO compensation structure on corporate actions to build customer and employee relations depends on market instability. Unstable markets often feature rapidly changing customer demands, short product cycles, and fi erce market competition (Dobni & Luffman, 2003). So in unstable markets, fi rms may have a greater need to motivate CEOs with compensation structures that build effective long-term customer–fi rm relationships as competition for customers becomes more intense and customers tend to be less bound to suppliers. Finally, Luo and his colleagues proposed that changes in corporate actions to build customer– and employee– fi rm relations positively infl uence changes in fi rmspecifi c customer satisfaction measures. Those changes in customer satisfaction partially explain the associations between changes in corporate actions to build customer—and employee—fi rm relations and changes in fi rm market value, making customer satisfaction a channel whereby CEO longterm equity compensation can affect fi rm market value.

Return on relationships: conceptual understanding and measurement of mutual gains from relational business engagements

PurposeRelationship is based on the idea of creating a win‐win situation for parties involved in a business engagement. The purpose of the article is to develop a model of mutual value creation and reciprocal return on relationships (RORR) assessment, which enables calculation of joint and separate gains from a relational business engagement.Design/methodology/approachThe approach takes the form of a conceptual analysis, which is tested empirically through a real‐life case. The empirical part is based on a longitudinal empirical study including several empirical cases.FindingsFollowing a practice matching process, resulting in mutual innovation and aligning of their processes, resources and competencies, the parties in a business engagement make investments in the relationship. This enables the creation of joint productivity gains. Valuation of joint productivity gains produces an incremental value, which can be shared between the parties through a price mechanism. Finally, based on this shared value and costs of investments in the relationship by the parties, a reciprocal return on the relationship can be assessed and split between the business parties.Research limitations/implicationsThe study addresses dyadic business engagements only. The findings enable calculation of reciprocal return on relationships (RORR) and form a basis of further development of marketing metrics and financial contribution of marketing, and of developing financial measures of intangible assets called for by the finance and investor communities.Practical implicationsUsing the conceptual model and corresponding metrics, the financial outcome of the development of customer relationships as well as an assessment of the return on relationships with customers can be established.Originality/valueThe approach to assess the value of customer relationships as a two‐sided endeavor is novel, as well as the joint productivity construct and the value sharing approach, and the way of assessing ROR as a reciprocal measure that can be split between the business parties.

Service loyalty: accounting for social capital

PurposeTo the extent that customer relationships with service providers provide value to service firms suggests that these relationships can be viewed as social capital. This paper seeks to use social capital as a theoretical framework to examine the effect of these relationships on customer loyalty.Design/methodology/approachData were collected using an online survey of 342 adult consumers of services.FindingsResults of structural equation modeling analyses indicate that social capital variables explain unique variance in customer responses. The effect of each of the three forms of social capital – structural, cognitive, and relational – are contingent on whether the service is personal (e.g. hairstylist, medical services) or non‐personal (e.g. mechanic, banker).Research limitations/implicationsThis research suggests that customer relationships can be viewed as social capital and that the form and content of such relationships are important in terms of influencing customer loyalty.Practical implicationsManagers can build “social capital” by focusing on its three forms – structural, cognitive, and relational social capital. The paper provides prescriptions for such relationship building activities. Such social capital translates into firm value/profits through customer loyalty.Originality/valueThis study uses a theoretical framework from research in social capital to help explain the value of customer relationships with individual service providers to the firm. The idea of social capital is compelling to service managers since it implies that investments in relationship building tactics have real results for firm profitability.

Antecedents of Principal–Agent Relationship Value: The Differential Impact of Social Capital and Dynamic Learning Factors

Although the critical role of relationship value to business has been widely acknowledged, a review of the extant literature reveals that understanding on antecedents of relationship value is limited to relationship-specific factors, and impacts of key customer relationship value on performance still await empirical substantiation. Grounded in dynamic learning capability and social capital perspective, this study collected a sample of 411 principal–agent relationships to examine the relative impact of predictors in creating relationship values from the supplier angle. The result shed light on the significant mediating role of dynamic learning over the linkage between social capital and relationship value.

Effects of information sharing on customer relationship intention

PurposeThis study aims to analyze the effects of information sharing on customer relationship intention (CRI) based on the characteristics of different trading relationships.Design/methodology/approachThis research was conducted in two phases to explore the effects of information sharing on relationship intention of different customer segments. The objective of phase one was to segment different customer groups according to two criteria: customer relationship value and customer responsiveness. The objective of phase two was to analyze the impact of information sharing on these segmented customer groups.FindingsData from 239 customers of a large steel supplier indicate that information sharing positively influences CRI and that the characteristics of the trading relationship moderate the effects of information sharing. These findings suggest that, while information sharing is an important means of enhancing a customer relationship, not all types of customer should be treated the same way.Research limitations/implicationsAssessment of customer intention depends on the structure of the buyer‐supplier network. Other extraneous variables such as branding, industrial position and bargaining power may influence customer attitudes towards information sharing‐induced changes.Originality/valueThis paper contributes to the understanding of the effects of different levels of information sharing on different customer clusters differentiated by trading relationship characteristics.

The Theory of Customer Relationship Valuation

Abstract The expectation of continued patronage from existing customers is recognized as a valuable business asset. For many business enterprises, customer relationships can represent a significant component of corporate balance sheets. The valuation of customer relationship intangible assets considers the underlying life characteristics of the customer population along with expected earnings from the customers in estimating the customer relationship value.

Measuring Customer Relationship Value: The Role of Switching Cost*

Conceptually, customer relationship value depends on customer perceptions of the cost of switching to another supplier. Empirical tests of switching cost effects have been hampered because traditional performance measurement systems and customer satisfaction scores do not reflect switching cost perceptions within comparable market segments across firms. Using unique data systematically collected by market segment from online retail customers, we find that a) our switching cost proxy adds statistically significant explanatory power for both future buyer behaviors at the segment level and future financial performance at the firm level, and b) the positive relation between customer attitudes and future buyer behavior is increasing in switching cost. Our results show that externally generated non-financial data collected periodically across market segments can individually and jointly provide valuable information about segment and consolidated entity performance.

Survivor Curve Selection and Customer Relationship Value

Abstract The valuation profession employs a variety of statistical techniques, from simple attrition analysis to more complex retirement rate analysis, to assess customer population life characteristics. For many customer populations, the account survival characteristics are assumed to be constant across the various age cohorts of the population such that customer relationship value is indifferent to account age. However, relaxation of the constant attrition rate characteristic can have a direct influence on the magnitude of the value ascribed to the customer relationship value.

Measuring Customer Relationship Value: The Role of Switching Cost

Conceptually, customer relationship value depends on customer perceptions of the cost of switching to another supplier. Empirical tests of switching cost effects have been hampered because traditional performance measurement systems and customer satisfaction scores do not reflect switching cost perceptions within comparable market segments across firms. Using unique data systematically collected by market segment from online retail customers, we find that a) our switching cost proxy adds statistically significant explanatory power for both future buyer behaviors at the segment level and future financial performance at the firm level, and b) the positive relation between customer attitudes and future buyer behavior is increasing in switching cost. Our results show that externally generated non-financial data collected periodically across market segments can individually and jointly provide valuable information about segment and consolidated entity performance.

Customer Valuation as a Driver of Relationship Dissolution Sabrina Helm Heinrich-Heine-Universitaet, Germany

As all customers are not created equal (Hallberg & Ogilvy, 1995), the different contributions of customers to a supplier's goals have to be evaluated to grant efficient relationship marketing. Furthermore, a handling system has to be developed for unprofitable customer relationships. This is a hitherto neglected field, as marketing researchers and practitioners are generally rather interested in attaining and keeping customers, not in the ending of relationships. The article aims at integrating the concepts of customer equity and profitability with approaches of relationship dissolution, which have recently emerged in the literature. Different aspects of calculating the value of customer relationships and value-based criteria that focus on monetary and non-monetary components of a customer's value are discussed. In an exploratory study undertaken in the German mechanical engineering industry, the relevance of customer valuation to dissolution decisions is analyzed.