CRM 11- Performance measurement
Important stakeholders of a company
- Shareholders / Board of directors
An organisation must maximize the main sources of revenue, profit and growth within the context of both business and customer strategy. The three key stakeholders group are:
Employee value needs to be considered from two perspectives.
#1 the value employees deliver to the organization
- This is usually measured against a number of performance objectives, where employees are appraised against performance targets
#2 the value the organisation delivers to the employees
- Comprises the benefits the ...view middle of the document...
Good Performance over time will only come from well-motivated staff. Performance management is an approach which allows managers to impact their goals and responsibilities in serving the customers internally and externally.
It involves a cycle of clarifying business goals and customer needs and then agreeing individual objectives and standards of performance. With coaching, developing and rewards, improved performance is possible from employees who:
- What is expected of them
- How they are doing
- What they need to do next
- What help they will receive
Customer Equity is no different from life time value of a customer. It is the lifetime value/profit of its customers minus the cost of acquiring or retaining them
The focus is on the components of Customer Equity :
#1 Brand equity: It is the customer’s subjective and intangible assessment of the brand, in particularly, the emotional connection to the brand.
#2 Value equity: It is the customer’s objective evaluation on the value of quality, price and convenience.
#3 Retention /Relationship equity: It is the tendency of the customer to stick with the brand, above and beyond the customer’s objective and subjective assessment of the brand.
These allow marketers to seek clarity in dissecting their strategies according to their objectives in the areas of building Brand, Value and Relationship with their lifetime customers.
Example One: New Company with a new brand may place more emphasis on Brand Equity.
Example Two: A highly competitive industry in the likes of Retail will focus more on Relationship/Retention as customers to tend to defect easily.
Customer Equity is achieved by a company’s commitment to delivering ALL the 3 components. The 3 components are interdependent.
Example: If a company focuses only in Brand and Value, and not Relationship, then this may lead to only short term gains in market shares and brand awareness.
Importance Of Customer Equity
- Shifts focus from” sales” and “market share” which leads to ill-considered promotions and acquiring the wrong customers => drop in profitability
- Empowers segmentation strategies => provides insights to resources deployment.
Assessing Customer Equity
#1 Brand Value
- Are you the industry leader in brand awareness?
- Do customers pay attention to and remember your advertising and the information you send them?
- Are you known as a good corporate citizen?
- Active in community events?
- Do you lead your industry in the development and maintenance of ethical standards?
- Do customers feel a strong emotional connection to the brand?
#2 Value Equity
- Are you the industry leader in overall quality? Do you have initiatives in place to continuously improve quality?
- Do your customers perceive that the quality they receive is worth the price they paid?
- Do you consistently have the lowest...