ABSTRACT
Over time, it has become obvious that satisfying customers’ needs must be a
key element in strategy formulation, for differentiation and competitive
advantage to be achieved, and sustained. Any customer-related initiative or
interaction must differentiate customers to give insight into the valuecreating
potential of those customers. Nevertheless, at the strategy level,
many companies remain focused on pushing out products rather than
drawing in customers. If a company’s strategic focus is to sell as many
products as possible, customers will be overwhelmed by irrelevant
marketing and sales offers, and their satisfaction will be lowered. This study
objective is to find out the value of the customer to the company, and to
analyze the various tools that a company can used to measure and manage
the customers.
The objective of this study range from evaluating the value of
the customer toward higher profitability, how a company can migrate
unprofitable customers and what motivate customers to strengthen their
relationships with the company. To be able to test our findings four
hypotheses will be tested. The second part of the study talks about related
literature on customer value management and various measurement tools.
Data collection for this thesis has been through a survey questionnaire from
companies in different areas of production ranging from manufacturing to
service delivery. The data was analyzed using chi square test. The findings
of the research shows that finance, customer relationship management and
improve customer loyalty by companies will lead to profitability of the
company. It was also agreed that corporate reputation and how the customer
view the organization contribute in creating customer satisfaction. Finally it
should be noted that not all customers can be profitable today and some
provide learning opportunities, whilst others are strategically important or
may be unprofitable today but are tomorrows ‘cash cows’. Customer
profitability measurement informs many important business decisions and is
becoming a ‘must-have’ inside many organizations.
