How Customer Relationships Are Sources of Value
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How might customer relationships be sources of value? What metrics might be particularly important in assessing an organization's customer capital or the value of its customer relationships? Can you provide examples where one can see a close relationship between market value and the changing assessments of the quality of the customer relationship?
Can you give examples of customer capital outside of the for-profit sector?
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The solution discusses how customer relationships are sources of value.
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How customer relationships can be sources of value:
A firm's most valuable financial asset is its customer base. Companies won't be able to realize income from other entities except with the customers that they have now and in future. Businesses that maintain good relationships with the customers end up producing sustainable results to clients. Organizations should maintain customer relationships effectively so as to remain competitive (Farris, Bendle, Pfeifer, Reibstein, 2006).
Customer relationship has been able to be managed by firms due to advancement in technology. Customers demand much more from companies they do business with and inform themselves since they get empowerment from customers. Customers help enterprises in research and development of their products and services. Companies produce products based on customer tastes and preferences since the potential customers purchase products that suit their tastes (Farris, Bendle, Pfeifer, Reibstein, 2006).
Customer relationship leads to the maximization of profitability in the short to intermediate term and for maximizing revenue in the near-term. Building customer ...
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