Customer value model

customer value model (CVM) is a data-driven representation of the value, in which the company is doing business. [1] [2] [ self-published source? ] Customer value models are used primarily in B2B markets where the choice of a given product, service, or offering is primarily based on customer value. Customer value is defined as Value = Benefits – Price. Thus, customer benefits are quantified in a CVM – product features and capabilities are translated into dollars. Customer value models are different from customer lifetime value models, which seek to quantify the value of a customer to its suppliers.

Firms using customer value models

Many firms-have-been Reported to use customer value models, [3] Including General Electric , Alcoa , WW Grainger , Qualcomm , Sonoco , BT Industries Group, Rockwell Automation , and Akzo Nobel ..

Uses of customer value models

  1. New product and service development and refinement: The relationship and the customer is one of the most important features of the market. This on-site interaction can be used to define and define features and functionality. Often a key is to focus on product or service capabilities rather than on features. Successful CVM endeavors to change the basis of the customer-supplier product conversation from features and functions and toward problems, benefits, and value. [2] [4]
  2. Sales tools: CVMs can serve as a quantified statement of value and benefits for a customer that is used by the salesperson as a salesperson to a new account and grow current customer. CVMs also can help the firms to determine the more rational promotion cost. [2]

Customer value model methods

There are several methods and approaches used to create customer value models. All of these approaches appear to depend on a large number of customer interactions and on-site interviews and observations of customers. The CVMs are of varying complexity. P & Ls (profit and loss statements) to establish a clear connection between the product benefits and the bottom-line customer. [2]


  1. Jump up^ Anderson, James C; and Narus, James A, (1998), “Business Marketing: Understanding What Customers Value,” Harvard Business Review, March, p 53-65
  2. ^ Jump up to:d Dupuie, Jeff: Using Customer Value Models to Improve B2B New Product Development Archived 2015-11-23 at the Wayback Machine , Oakstone Partners.
  3. Jump up^ Anderson, James C; Narus, James A; and van Rossum, Wouter, (2006), “Customer Value Proposition in Business Markets,” Harvard Business Review , March, p 91-99
  4. Jump up^ Lindstedt, Per and Berenius, Jan, (2003), “The Value Model: How to Master Product Development and Create Unrivaled Customer Value”, Nimba Publishers