Noel Capon

Managing Strategic Customer Relationships as Assets: Developing Customer Relationship Capital

Coauthor(s): Peter Mathias.

Download:

Adobe Acrobat PDF

Abstract:

Increasingly, the greatest source of economic value for many companies is a set of intangible assets that, typically, are not reflected on their balance sheets. Whereas for B2C companies these intangible assets are often dominated by brand value, for many B2B companies these assets are a set of relationships with a core group of powerful customers. When these relationships are well-developed and ongoing, they produce sustainable returns to shareholders. Our continuing research at the Columbia Business School Center for Strategic Customer Management is designed to explore the issue of customer relationship capital (CRC). We believe that CRC is the primary source of economic value for many B2B companies.

The notion of customer relationship capital raises several important questions. First, how does a firm systematically create customer relationship capital? Second, most companies are managed as a portfolio of businesses defined by products and/or technologies; if a firm?s main assets are long-term customer relationships, how should it be managed differently? Rather than optimizing resources across products, presumably companies would optimize the economic value of their core customer relationships over the long-term. Product life cycle management accepts that, over time, products lose their ability to generate premium returns; if managed appropriately, customer relationships returns may be more sustainable over the long-run. Finally, where should a company invest its marginal dollar—in developing enhanced customer relationships, or in expanding product functionality and capacity?

Source: Velocity
Exact Citation:
Mathias, Peter, and Noel Capon. "Managing Strategic Customer Relationships as Assets: Developing Customer Relationship Capital." Velocity 5, no. 2 (Spring 2003): 45-49.
Volume: 5
Number: 2
Pages: 45-49
Date: Spring 2003