Value Creation Measurement and Management in Times of Radical Social and Technological Change. (November 2022)

• Record Type: Journal Article
• Authors: Wiesel, Thorsten
• Other Names: Kumar V. guest-editor.; Srivastava Rajendra guest-editor.
• Is Part Of: Journal of creating value. Volume 8:Number 2(2022)
• Page Start: 171
• Page End: 183
• Publication Date: 2022-11
• Subjects: CLV -- entrepreneurship -- strategic decision making -- turbulent times -- sustainability; Customer services -- Periodicals; Customer relations -- Management -- Periodicals; Consumer satisfaction -- Periodicals; 658.812
• DOI: 10.1177/23949643221117678
• Languages: English
• ISSNs: 2394-9643

Abstract

This article tries to deepen our knowledge on the nature of value creation and management in times of turbulent environments both for business management and academic research. The current uncertainties in our economy—coming from exogenous shocks (e.g., financial crises, political standoffs [US–China], pandemic and Ukrainian war) or from demand for more sustainable activities—affect existing companies and provide opportunities for new ventures. Both type of firms need to think of innovative and out-of-the-box ideas to keep generating value for all stakeholders, and particularly to their customers. The nuanced understanding of the factors describing the current economic situation and their effect on value creation and management affects management by, for example, efficient use of resources, and assists in strategy formulation and decision-making. Customer value creation is a dual concept: creating value for customers (value-to-customer [V2C]) as well as extracting some of that customer value at the same time to create value for the firm (value-to-firm [V2F]). While this might be known, it is rarely implemented. In order to deliver V2C, firms should look at the customer journey from a customers' point of view rather than a firms' point of view. Only then, the real revenue potential can be realized when thinking about monetizing the customer interface and, hence, developing the customer relationship options beyond the current business. Even if it exists for a long time already, customer lifetime value (CLV) und customer equity (CE) are the right techniques to measure and manage value in such times. Besides, in today's environment, the gap between CLV and CE and shareholder value needs to be closed. Existing customer-based corporate valuation studies do exactly so and, more importantly, will become even more important in the future due to new business models.