The aim of all businesses is to create a value proposition for customers which is superior to and more profitable than the competition. The value proposition can be specifically described in terms of:

• the target customers;
• the benefits offered to them and;
• the price charged relative to the competition.

The value creation process is a critical component of CRM as it translates business and customer strategies into specific statements of what value is to be delivered to customers and, consequently, what value is to be delivered to the supplier organisation. It consists of three key elements:

• determining what value the company can provide to its customers;
• determining the value the organisation receives from its customers and;
• by successfully managing the value exchange, maximising the lifetime value of desirable customer segments.

The emphasis in many companies in on the second element of value. There is however, remarkably little by way of agreement amongst managers and commentators on what constitutes customer value, and indeed typically companies do not specify in sufficient detail the value they seek to deliver to clearly identified customer segments and micro-segments, nor how they propose to deliver this value.