What Is Customer Asset Management?

(Customer Asset Management, CAM)

The research on customer asset management originated from the United States.

As a new management concept, the key of CAM is to integrate customers into the assets of enterprises and optimize the allocation of enterprise resources with customer equity as the core to enhance customer loyalty / satisfaction and customer value.

In order to achieve this goal, the theoretical circles put forward various kinds of customer assets.

Customer Asset Management (CAM)

Catalog

1 overview of customer asset management 2 the role of customer asset management 3 the main schools and problems of customer asset management 4 further exploration of customer asset management.

Overview of customer asset management

The research on customer asset management originated from the United States.

As a new management concept, the key of CAM is to integrate customers into the assets of enterprises and optimize the allocation of enterprise resources with customer equity as the core to enhance customer loyalty / satisfaction and customer value.

In order to achieve this goal, the theoretical circles put forward various management models of customer assets, which mainly include two types: one is the management framework, which aims at explaining the relationship between customer assets and enterprise value, linking customer oriented activities to customer equity and enterprise competitiveness, such as Paul D. Berger and Ruth N Bolton, etc, putting forward a customer asset management model based on four factors (building database, customer segmentation, CLV prediction and resource allocation). The other is marketing framework, which aims to understand the way of customer behavior and its relationship with customer total assets, and strive to explore the impact of customer oriented activities on customer behavior.

Typical representatives include Berger and other marketing models based on customer lifetime value; and Bell et al. Analyzed seven obstacles to the birth and implementation of customer asset management mode, and provided a marketing model based on customer equity.

In fact, the research in this field is still in its infancy, and there are still many defects and problems in the existing research.

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The role of customer asset management

The study of customer asset management not only enriches the existing theory of customer relationship management, but also has practical significance for enterprises. Specifically, the significance of customer equity management research includes:

(1) deepening the theory of customer relationship management.

Different from traditional customer relationship management theory, customer equity management based on customer loyalty considers customer relationship from a dual perspective.

On the one hand, the improvement of customer loyalty must be based on the value that customers value. On the other hand, enterprises can also get more economic benefits and various non economic benefits from customers through improving customer loyalty.

It can be seen that customer equity management theory based on customer loyalty is a step further than the traditional customer relationship management theory.

(2) enrich the theory of customer asset management research.

Based on the literature on customer equity management, we can find that the research on customer equity is still in its infancy. The research focus and research results are still quite different. Based on customer loyalty, customer equity management is based on customer loyalty. The framework of customer equity management is set up in detail. The hot and difficult problems existing in the study are explored and analyzed. Therefore, customer equity management research based on customer loyalty can effectively enrich the content of customer asset management.

(3) improve enterprise performance.

Through the study of customer equity management based on customer loyalty, enterprises can obtain more loyal customers, and maintain customers through long-term customer loyalty to gain more monetary value and non monetary value of customers. That is to say, customer equity management based on customer loyalty can maximize customer assets by means of more effective marketing communication and more effective customer lifetime value management, so that enterprises can get higher profits.

(4) provide basis for enterprises to formulate marketing decision plans.

Enterprise managers often measure the performance of enterprises according to the market share of products or services. However, market share is a rearview mirror that measures business performance. It can only show the past performance of enterprises, but can not show the future performance of enterprises.

It can be seen that market share can not effectively measure the profit of marketing investment of enterprises.

Enterprises should measure the effect of marketing investment according to the impact of marketing investment on customer assets, because customer assets tend to pay more attention to the future performance of enterprises.

Therefore, customer equity management based on customer loyalty is not only concerned about how marketing investment affects the current performance of enterprises, but also considers the impact of marketing investment on the future performance of enterprises.

The method of marketing resources allocation can provide more accurate identification of the most suitable customers and formulate the most appropriate marketing activities, and more effectively manage all kinds of economic and non economic benefits from customers, so as to provide decision-making basis for enterprises to make marketing plans.

(5) increase the competitive advantage of enterprises.

Through the customer equity management, the enterprise loyal customer resources, the ability to attract new customers, maintain and upgrade the old customers, and comprehensively manage customer relationship and accumulated knowledge become an important core factor for the sustainable development of enterprises.

This valuable resource, capability and knowledge can effectively combat the five forces of the external forces of enterprises, thus making customer asset management an important source of competitive advantage.

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At present, the research of customer equity is still very messy. The emphasis and purpose of the research are quite different. Foreign scholars have mainly studied the theory of customer asset management in the following three categories:

(1) financial measurement of customer assets.

The representatives of the genre include: GuildingandMcManus (2002), Berger, Bolton (2002), Liu Yingzi and Yao Lan (2003).

Scholars of this school believe that customer equity will bring economic benefits to enterprises.

However, this kind of economic interest has certain uncertainty compared with tangible assets, so it can be attributed to intangible assets. This kind of researcher tries to measure customer assets by means of measurement and accounting.

At present, this kind of researcher has only done some conceptual and theoretical models for customer asset management, but the practical operational model is not yet available.

The operation of asset balance has not been realized by recording customer assets in the accounting entry.

However, we can see that measuring the customer's income and cost by means of financial measurement is a kind of "past" customer profitability analysis. However, in the effective market, the information circulation is convenient, the customers who are satisfied with the enterprise products and services will not only repeat the purchase, but also become the intermediary of the free enterprise, which will affect the purchasing decision of others. After the satisfaction of other customers, it will affect the other customers to take action. In this benign cycle, the number of customers in the enterprise grows geometrically, on the contrary, the number of geometric levels decreases.

Therefore, the analysis of customer profitability should be oriented to the future. Considering the expected influence of the customer, we should not rely on the short-term profitability analysis to make decisions, but the long-term and future interests should be considered.

So it can be seen that the financial measurement schools of customer assets only consider the economic profitability of customers from the perspective of the past. They have not analyzed the value source of customer equity in a detailed, complete and systematic way.

(2) resources and capabilities of customer assets.

This school aims at understanding the relationship between customer assets and enterprise value, linking customer oriented activities to customer equity and enterprise competitiveness. Its representatives include: Rust and Zeithaml (2000), Leyland and Ewing (2000), Hogan and Lemon (2002), Chen Zhenxue (2003), Wang Tao and Xu Lan (2002).

The biggest contribution of this genre is to link customer asset management with the competitiveness of enterprises, and to measure the performance of enterprises with the effect of customer asset management. However, the current study of the genre does not have a theoretical discussion on the cultivation of customer asset management capability, nor does it have an empirical analysis aimed at identifying the key capabilities of customer asset management and its impact. It has been relatively slow to solve the problem of customer asset management by drawing on and using enterprise resource theory, capability and knowledge theory, but this school has laid a foundation for the study of customer equity management based on resources and capabilities.

(3) the marketing structure of customer equity.

This genre aims at exploring the way in which marketing acts on customer behavior and its relationship with customer assets, and tries to explore the impact of customer oriented activities on customer behavior.

From the field of marketing, it can be divided into three aspects: the first aspect is to study the optimal investment, resource allocation, marketing budget and performance of customer assets, or to study the methods and Strategies of customer acquisition and retention; and the second aspect is to study the antecedents of customer asset management, including customer lifetime value, customer life cycle, the driving factors of customer assets, the formation mechanism of customer assets, the composition and measurement of customer assets, the quality analysis of customer assets, and so on. The third aspect is to study the relationship between marketing activities tools and customer assets and customer profitability based on the identification of customer asset management antecedents.

The representatives of the school of customer asset marketing structure include: Reinartzetal (2003), Behram, Paul (1997), BehramHansotia (2004), PaulD.Berger, Nada (2001), Blattberg, Robert (1996), Berger and Bechwati (2001), Blattberg and Bechwati (20012002), Xu Lan (2004), etc.

The research of this school mainly has the following shortcomings:

Most of the researchers tend to regard customer retention and customer attraction as the only important source of customer behavior and value, while ignoring the contribution of other customer asset management behaviors, such as upgrading, divestiture and loss management, to customer asset value and enterprise performance.

Although customer satisfaction and other factors have attracted some scholars' attention, customer loyalty has been neglected as an important antecedent factor of customer behavior.

Therefore, it is urgent to systematically explore the antecedent elements of customer behavior and deeply analyze the behavioral drivers of customer equity value.

At present, many researches ignore the influence of customer's non purchase behavior, such as customer recommendation value, customer information value and customer knowledge value on customer assets.

In addition, the theoretical and empirical research on the driving factors of customer purchase behavior and the difference of marketing activities on customer assets at different levels is also very limited.

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Further exploration of customer asset management

Research on customer asset management still deserves further exploration.

1. the value of customer assets is not only reflected in the financial aspects of monetary value, but also has non-financial value.

Satisfied customers produce satisfactory employees, thereby directly serving employees' morale, improving their productivity and improving their service quality.

Satisfied customers show psychological trust, identification, dependence and intimacy on their employees.

These are undoubtedly the most valuable intangible assets of enterprises.

The current literature research focuses on the value measurement of customer assets, but there is no research on how to measure the value of customer assets in non-financial aspects.

2., enterprises only pay attention to the measurement of the financial value of customer assets, which may result in narrowing the behavior of customer asset management.

Enterprises may focus on the recording and tracking of customers' purchase behavior, but not enough attention is paid to customer attitudes and emotional components, such as inaccurate bill issuance and poor product / service delivery.

In fact, there is an indispensable relationship between attitude and emotion and behavior.

Positive and affirmative attitudes and emotions contribute to the steady and lasting buying behavior, while negative and negative attitudes and emotions are very easy for customers to lose and stop buying.

Therefore, to abandon customer's attitudes and emotions, it is a kind of practice to study customers' purchase behavior in isolation.

3., there is still room for development in terms of the perfection of the existing customer asset value measurement model.

As mentioned before, customers behave differently in different stages of life cycle.

If the existing econometric models can add one adjustment variable to reflect the different stages of the customer's life cycle, it may be more realistic.

4. the existing customer asset value measurement model is not operable.

On the one hand, enterprises need a powerful database system to record, track and analyze customer's purchase behavior information and income status. Even though many enterprises have such a database system, the information collection, processing and processing work is daunting and complicated.

A problem that can not be ignored is that at present many enterprises still lack the talents of compound statistical analysis who are competent for the work. On the other hand, there are still difficulties in the accurate measurement and apportionment of the individual cost of each customer. In addition, many variables in the model are based on subjective empirical estimates based on customers' past purchase behavior information, and the accuracy of the estimation depends to a large extent on the evaluation level of the appraiser.

It is hard to say whether the estimate can be close to the reality of the future.