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Customer value management is the term used to describe the attempts made to retain customers and achieve high customer loyalty. This may entail anything from customer rewards programs to customer service surveys. It is a generally-accepted business principle that retaining a current customer is far less expensive than attracting a new customer, so smart businesses will place a great value on customer value management.
If one considers all the marketing and advertising costs associated with acquiring a new customer, it seems obvious that keeping current customers satisfied with one’s product or service would be very important. Since statistics show that it is much less expensive to retain a current customer than to acquire a new one, a company must put at least some of its marketing and advertising budget toward retaining the customers already in place. There are a variety of ways to try to achieve this.
Customer value management first requires the mentality that the current customer is a huge value for the future as well as in the present. When a customer makes a purchase, he or she is telling the company that it has found its perfect audience. In order to retain those customers, customer value management should be emphasized within a company. This can be done in a variety of different ways.
First, the sales team on the floor or phone must be trained to treat the customer with the utmost respect and attention to his or her needs. Then, follow-up to the purchase can be provided in the form of a phone call, letter, or other method of communication. Customers can be periodically surveyed to determine their opinions on the performance of the company. The feedback is valuable and cannot fall on deaf ears if customer value management is to be maintained.
In rare industries where repeat purchases are not the norm, customer value management is less important. For example, items like mattresses are infrequent purchases so more attention needs to be paid to attracting new customers. One must remember, that good customer service may always lead to customer referrals, so good customer value management must never be ignored entirely.
It is important for companies to remember that customers are there because at some point, marketing efforts attracted them to the company's particular good or service. Marketing for new customers should never completely be sacrificed in exchange for customer value management. There should be a sweet spot somewhere in between, where new customers can be attracted and current customers can be retained.