Can you explain the concept of customer value and its importance to successful marketing? How are the concepts of customer value and relationship marketing linked?
In short, customer value means the potential spending the customer will be making with your company, assuming your total customer experience is satisfactory. It is the available budget for your products and services. It is important to successful marketing because you want to target those customers with the highest potential value, not just those with the highest actual value. Two customers might each purchase a $500 product from you. The first customer has a budget of $500 for the year, the second has a budget of $25,000. A successful marketing program should focus on the second customer and not the first one.
Customer value is not easy to determine, and it should be guiding both which customers marketers are targeting and how much they should spend to try to attract those customers. Obviously the spending on the customer with the $500 budget should be different than the spending to attract the customer who can spend $25,000 a year.