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This is the Customer Value Management (CVM) Frequently Asked Questions
list. It is designed to provide an introduction to what many companies
are finding is one of the most powerful approaches for winning and
retaining profitable customers. It attempts to answer all of the
following questions:
1. How does CVM compare with:
..a) Customer Satisfaction Measurement.
..b) Processed based service metrics.
2. What are the benefits of CVM?
3. How can I obtain more information about CVM?
4. Which companies are using CVM type approaches?
5. What are the mathematics of CVM?
How does CVM compare with:
(a) Customer Satisfaction Measurement?
Traditional customer satisfaction surveys look at the customer perception
of the service encounter in absolute terms. Usually these surveys
look at satisfaction with one attribute during a recent event or
transaction, such as paying a bill or opening an account. CVM research
complements traditional customer satisfaction research with monitors
that look at a range of product and service attributes, and the
customers perception of a company's performance in terms relative
to the competition.
(b) Processed based service metrics?
Business run every minute of the day. Operational Managers need
access to service metrics with information that is available on
a timely basis. Processes must be designed and operated with service
metrics so they maximise customer value. To ensure this happens
they must be derived from CVM research.
What are the benefits of CVM?
CVM maximises business financial performance by driving business
improvement from econometric analysis of customer and competitor
data. Linkages are established between market, customer satisfaction,
employee, and process data. This ensures that the products and services
of a business align with customer needs and at the same time achieve
maximum profitability. In this way all stakeholders are delighted
with their interactions with a business.
How can I obtain more information about CVM?
For recommended information to learn more about Customer Value Management,
go to Books, CD-Roms and Papers on Customer Value Management and
The Customer Value Management - Amazon.com Bookshop
Which companies are using CVM type systems?
Nortel, Vodafone New Zealand, Scott Panel and Hardware, Roche Diagnostics,
Parke Davis, Whirlpool Standard and Poors.
"Striving for Customer Value", Report No. R-1167 published
by the Conference Board covers how 113 United States and European
firms are using customer value approaches.
Nortel Networks awarded APQC Best Practice Customer Value Award
What are the mathematics of CVM?
The basic formulae are:
Q = R.C.S
or Quality is defined in terms of Relative Customer Satisfaction.
V = f(Q/P)
or Customer Value is a function of Quality and Price
delta MS ----> delta V
or changes in market share are driven by changes in customer value.
I would like to implement a CVM system. Who is
available to help me?
ASIA PACIFIC
Rodger Gallagher
Customer Value Management NZ Ltd
Box 158, Raglan
New Zealand
email: rwg@cvm.co.nz
Phone: +64 (7) 825 7165
Fax: +64 (7) 825 7486
Mobile phone: +64(21)761 657
This document is intended for use by individuals and corporations
in a non-commercial manner. It may be distributed freely within
those limitations. Commercial use of this document in any manner
requires written permission of the author.
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