Question

Which four dimensions of value from the customer can be distinguished and how do they differ from one another? (customer lifetime value, customer influencer value, customer referral value, customer knowledge value)

Answer 1

Answer:

The first element, CLV, has been extensively investigated within the selling literature and there's a large body of analysis that exists to live, calculate, and monitor cardinal. Therefore, readers' area unit brought up one among the many reviews (e.g., Reinartz and Venkatesan 2008) for an in-depth understanding of the metrics aimed toward capturing cardinal.

The second element, CRV, captures the worth of however client referral programs will improve the gain of the client base by cost-effectively getting quality prospects (Kumar, Petersen, and Sierra Leone monetary unit 2010). the analysis shows that customers WHO area unit connected with additional prospects and act additional with these prospects is smart targets for referral programs. Life of the number of connections and their level of interaction may, therefore, offer valuable input for CRV calculations. moreover, a firm could generally need to take a position additional resources in sure customers WHO area unit possible to be opinion leaders (and influence the acquisition of alternative profitable customers) even supposing they will not be profitable themselves (Gupta and Mela 2008). Since customers with the very best CLV aren't essentially forever those with the very best CRVs (Kumar, Petersen, and Sierra Leone monetary unit 2010), this provides proof why customers ought to be evaluated on each dimension. In turn, a firm may conjointly live and appraise the motivations of opinion leaders to unfold WOM and build methods that rest on those motivations.

The third element, CIV, captures the worth of the influence that a personal (usually a customer) exerts on alternative customers or prospects. additionally to the number of prospects the client is in a position to convert, the emotional valence of the customer’s reviews or conversations with alternative customers will offer vital input into the effectiveness of their actions and thus their influencer price (Chevalier and Mayzlin 2006). The strength of ties of the client at intervals the network, the number of individuals in their corresponding network, and his or her probability of sharing opinions conjointly provides valuable data. Customers WHO have weak links with many teams area unit expected to possess the next client influencer and referral values as a result of they're more practical in spreading a message than customers WHO have robust links with a smaller set of teams (Feick and worth 1987; Gladwell 2000).

The final element, CKV, captures the worth of feedback provided to the firm relating to ideas for innovations and enhancements. following a customer’s product or service experience as an example (which is related to with their CLV) is valuable in assessing CKV (von Hippel 1986). additionally, to experience, the disposition to produce feedback is an associate attitudinal issue that may cause higher CKV. moreover, defected customers may additionally contribute to CKV by sharing their reasons for going away, permitting the firm to spot service improvement opportunities and increase its capability to notice at-risk customers (Stauss and Friege 1999; Tokman, Davis, and Lemon 2007). Finally, the extent of the connectedness of shoppers to alternative prospects and customers will offer the aptitude to higher assimilate data from their networks and thus the market once providing feedback, thereby increasing their information price to the firm.