Example Of Essay On Enabling Strategic Value With Information Technology

– One of the distinctions made in business is between high value and low-value customers. However, a customer can move from one definition to another through a number of ways. One of them is increasing the sales for every existing customer. This is through up-selling or cross-selling, with caution not upset customer relationships. Another way is retaining existing customers for longer. While there are many approaches to achieving this, the primary goal is to keep the customer for longer as it is economically cheaper compared to recruiting a new customer. Alternatively, a customer can move from one definition to another by lowering the cost to serve a particular customer. This can be done by moving ones customers to channels that cost considerably less and halting marketing efforts to customers who are unlikely to purchase more products (Stenzel et al., 2010).

– While exhibit 6.2 illustrates customer portfolio management, the most subtle message carried is the need for customer information in realizing profit opportunities and revenue. Exhibit 6.2 underscores the importance of understanding the customers a business serves. By using the single view foundation, a business can analyze customer information in order to make several decisions that affect customer relationship, and hence the business. Additionally, the availability of all the customer information in a single view will enable the delivery of services to the customer through marketing delivery systems that are efficient (Stenzel et al., 2010).

– This section underscores various interpretations of metrics that are important for marketers. The take-home point in this sections is that while the most profitable customers are appealing because of high scores in metrics like frequency, income level and churn propensity, this information may not reveal everything about said customer, hence the need to pursue the most valuable while managing and maximizing the profitable customers (Stenzel et al., 2010).

– The determination of the customer’s lifetime value is critical in business. The value appended is critical in deciding how much to invest in retaining a customer. In determining the customer lifetime value, various cost and revenue elements are used. Exhibit 6.7 illustrates the interplay between these elements. Businesses can create profiles that enable them to attract customers with similar characteristics. Through this, differentiated services and marketing campaigns are designed to ensure that the customer lifetime value for the various segments is achieved (Stenzel et al., 2010).

– Business approaches are rapidly changing from a focus on the products to the customer. Businesses are investing in customer relationships in order to improve the customer experience, thereby increasing the value of customers. In this regard, even businesses that vend products rather than services endeavor to ensure that the service to customers is unraveled. This is especially so because of competition from virtual stores that offers after sales services like subsidized shipping for their customers, thereby setting high expectations for customers. While this serves as an example, it also underscores the shifting focus to the customer, and the approach where quality service is used as a source of competitive advantage (Stenzel et al., 2010).

– The five forces that are notably responsible for the “perfect storm” for enterprises endeavoring to manage marketing include the retention of customers, changes in the where companies source competitive advantage, use of technologies in marketing such as “one-to-one” marketing, the shift of powers to the customers and the increased product variation, diversity and customization. The changing focus on customer retention rather than the acquisition of new customers is particularly intriguing. Businesses acknowledge the expenses that come with recruitment drives for new customers. The alternative is to engage in activities that enhance customer loyalty. Understandably so, many supermarket chains have rolled out customer loyalty programs that promise incentives to the customers in a bid to retain them. I reckon that recruitment drives for new customers should not be entirely replaced (Stenzel et al., 2010).

– The single view is a concept that requires the consolidation of all the relevant and accurate data that is related to one customer. Under the single view platform, customer related data from different operational systems, organizations and databases are consolidated in one database. This is important because it reduces the difficulty in accessing and analyzing customer data because it is found in different systems within the organization. As such, the single view enhances efficiency in data handling and retrieval (Stenzel et al., 2010).


Stenzel, J. et al., (2010). CIO Best practices: Enabling strategic value with information technology, New York. John Wiley & Sons

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