2005 Q2 Book Review
Customer Connections
by Robert Wayland & Paul Cole
With this book, managers have a new strategic framework for making explicit connections between what they know about their customers and how they can leverage that information to create value. The authors reveal a comprehensive system that places customer relationships at the center of your business and shows you how to use this system to discover and tap new sources of value to improve your firm’s profitability and growth.
Since customer relationships are a firm’s most valuable assets, it becomes important to estimate the value of these relationships and decide how much to invest in acquiring and keeping them. As the authors mention, the asset value of a customer relationship is called customer equity and the value of that equity depends on the net cash flow over time. Throughout the course of the book, the authors have used many illustrations of companies that have leveraged customer equity. The examples provided for Staples and Pioneer Hi-Bred were particularly interesting.
Customer Connections provides new ways to think about value creation. It pulls together the strategy and the action plan for building and managing customer portfolios and for leveraging customer relationships for competitive advantage.