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What is your Return on Customer Investment?

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CEOs and CFOs like numbers; mostly profitability numbers. If you can't
speak their language and convert your project or proposal into numbers that talk to
them; your chance of having it approved are slim to none.

Return on Customer Investment is a business approach that looks at all of your customer
focused investments and puts hard return on investment facts behind them.

Facts that you can take to your CEO or CFO to justify the investment to drive business profitability.

ROCI can be used to justify many types of customer focused investments including for example:

• *Customer Satisfaction *- how oh how do you justify investing in increased customer
  satisfaction. Its so soft and hard to relate to profit. We have several approaches
  that can be used to develop hard business cases for investment in customer satisfaction.
• Customer retention - Justifying an acquisition campaign is conceptually easy but
  how do you justify investing in existing customers? Genroe have developed several
  return on retention models that look at the opportunity cost rather than the acquisition
  revenue of retention campaigns.

By definition, then, a business that focuses on a niche market is addressing a need for a product or service
that is not being addressed by mainstream providers. A niche market may be thought of as a narrowly
defined group of potential customers.

A distinct niche market usually evolves when a potential demand
for a product or service is not met by any supply,
or when a new demand
arises due to changes in society, technology, or the general
environment.

Niche market ventures may become profitable even though they are by nature small in comparison to the
mainstream marketplace, due to the benefits of specialization and focus on small identifiable market segments.
Niche markets may be ignored or discounted by large businesses due to
what they consider to be small potential;
this in turn is part of the
process that makes the niche market available to smaller businesses.The
key to capitalizing on a niche market is to find or develop a
market niche that has customers who are accessible, that is growing
fast enough, and that is not owned by one established vendor already.

LUCKIEST

I think I'm missing the paradox. I would agree that as recently as 1990, three-fourths of the stock market capitalization (valuation) of almost any company was in its "book value" assets (facilities, equipment, and cash). Now, however, book value accounts for less than one-third of the valuation the largest 100 U.S. companies -- including Coke and Nike. From an investor's perspective, most of a company's value lies in its brands, patents, databases, and know-how. So it seems that investors would find this neither contrary to received opinion nor opposed to common sense.

In analyzing how and why senior executives at those companies made key strategic decisions in recent years, protecting brand value often seems to be the most compelling driver (as opposed to say, safety or regulatory compliance). For instance, a commitment to be socially or environmentally responsible is often quite expensive for a company, but it boosts brand value and in turn, earnings -- so they do it with little hesitation. At this point, I don't think there are very many experienced managers who've missed that lesson.

The truly surprising thing to me is that so few entrepreneurs and small enterprises consciously think (at the business planning stage) about building their "intangibles" including a brand -- even though such assets are clearly the prime factor in powering start-up growth and attracting first stage investors.

Even if I missed your point (or just have a different perception), I appreciated the post/link. Thanks!