- Elgar original reference
Edited by Roland T. Rust and Ming-Hui Huang
Chapter 6: Customer engagement: a new frontier in customer value management
One of the most prominent developments in firms, and specifically within marketing, in the last decades has been the increasing amounts of customer data. This especially holds for service firms, such as banks, insurance companies, hotels, and so on. Service firms frequently interact directly with customers and have stored amounts of data of their customers. Moreover, through the use of loyalty programs, several service firms not interacting directly with customers, such as supermarkets, also have collected detailed knowledge about their customers (Dorotic et al. 2012). Firms have also heavily invested in customer relationship management (CRM) systems. According to Forrester, more than 72 percent of business-to-customer (B2C) firms regard retaining customers as one of their top priorities (Band 2010). Nowadays, firms have developed models to predict customer lifetime value and customer churn (Kumar and Shah 2009; Neslin et al. 2006). This has resulted in an increasing importance of customer value management as an important function within marketing and firms. Conceptually, customer value management (CVM) has its roots in relationship marketing. It entails maximizing the value of a company's customer base and analyzing individual data on prospects and customers. Firms use the resulting information to acquire and retain customers and to drive customer behavior with developed marketing strategies, in such a way that the value of all current and future customers is maximized.
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