Assignment on Crm: Overvalued & Undervalued Customer

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Introduction:
Customer engagement (CE) refers to the engagement of customers with one another or with a company or a brand. The initiative for engagement can be both consumer-led and company-led and the medium of engagement can be on or offline. Unlike marketing terms such as positioning, customer engagement has not been traced to a single source. Customer engagement has been discussed widely on online; hundreds of pages have been written, published, read and commented upon. Numerous high-profile conferences, seminars and roundtables have either had CE as a primary theme or included papers on the topic. Online customer engagement is qualitatively different from offline engagement as the nature of the customer’s interactions with a brand, company and other customers differ on the internet. Discussion forums or blogs, for example, are spaces where people can communicate and socialize in ways that cannot be replicated by any offline interactive medium. Customer Engagement marketing efforts that aim to create, stimulate or influence customer behavior differ from the offline, one-way, marketing communications that marketers are familiar with. Although customer advocacy, for example, has always been a goal for marketers, the rise of online user generated content can take advocacy to another level. The concept and practice of online customer engagement enables organizations to respond to the fundamental changes in customer behavior that the internet has brought about, as well as to the increasing ineffectiveness of the traditional 'interrupt and repeat', broadcast model of advertising. Due to the fragmentation and specialization of media and audiences, as well as the proliferation of community- and user generated content, businesses are increasingly losing the power to dictate the communications agenda. Simultaneously, lower switching costs, the geographical widening of the market and the vast choice of content, services and products available online have weakened customer loyalty. Enhancing customers' firm- and market- related expertise has been shown to engage customers, strengthen their loyalty, and emotionally tie them more closely to a firm. So today, leveraging customer contributions is an important source of competitive advantage – whether through advertising, user generated product reviews, customer service FAQs, forums where consumers can socialize with one another or contribute to product development. Customer engagement can also refer to the stages consumers travel through as they interact with a particular brand. This customer engagement cycle, or customer journey, has been described using a myriad of terms but most often consists of five different stages: awareness, consideration, inquiry, purchase and retention. Marketers employ connection strategy to speak to would-be customers at each stage, with media that addresses their particular needs and interests. When conducting the search engine marketing and search engine optimization, or placing advertisements, marketers must devise media and or keywords and phrases that encourage customer flow through the customer engagement cycle towards purchase. Going through the given journal, we have come to know that Customers can interact with and create value for firms in a variety of ways. This article proposes that assessing the value of customers based solely upon their transactions with a firm may not be sufficient, and valuing this engagement correctly is crucial in avoiding undervaluation and overvaluation of customers. The journal proposes four components of a customer’s engagement value (CEV) with a firm. The first component is customer lifetime value (the customer’s purchase behavior), the second is customer referral value (as it relates to incentivized referral of new customers), the third is customer influencer value (which includes the customer’s behavior to influence other customers, that is increasing acquisition, retention, and share of wallet through word of...
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