Making marketing decisions without a sound customer valuation model can be treacherous. Some customers consume, rather than generate, value. Growing that group is a road to ruin. Others may be harder to acquire, but will pay back the investment manyfold over the customer's lifetime.
Each business faces unique challenges to measuring customer value. Some have multiple revenue streams, while others face highly variable servicing costs and product profitability. Many need to integrate revenues and costs from multiple channels, and all companies need to account for different customer longevity and risk characteristics.
To address these complex issues, Aventine Partners uses a proprietary approach to jump start valuation initiatives employing industry-specific models for capturing revenue, expense, capital, and risk drivers. Value models integrate with both market strategy and program execution.
With a well-developed customer value modeling framework, managers are able to:
- Use common value metrics to evaluate investments in customer groups and marketing programs
- Translate marketing investments into expected changes in customer value
- Measure achievement of targets for improvement in customer value, increasing managerial accountability
- Use scenario planning based on customer investment and value creation as a strategy development tool
- Identify high-value customers that need to be guarded and preserved
- Focus on customers with modest current but high potential value and created targeted programs to develop these relationships
- Isolate value-destroying groups for triage, remediation, and where necessary, exit planning
All marketing is an investment in assets with a current value, potential future value, and risks. These assets are your customers, and Aventine Partners can help you userstand these critical dimensions so you can optimally target these investment decisions.
