The Wheel of Fortune Strategies to Maximize CLV:

Interaction Orientation:

In implementing these strategies, firms need to fundamentally reorient their marketing approach. Traditionally, firms had a “product-centric” approach, and managers were focused on making and selling superior products. In this process, the entire focus remained on the products. For firms to maintain future profitability, a “customer-centric” approach becomes imperative. In this approach, the timely interaction between the customers and the firm, and effective management of this interaction is recognized as a major source of competitive advantage. We define this interaction between the firm and the customer, which help in developing organizational resources for successful customer management strategies as “Interaction Orientation”.

In the “Interaction Oriented” approach, marketing activities are conducted with the customer. The customer is viewed both as a source of business and as a resource for the firm. The power of customer-to-customer linkages is recognized and nurtured as a customer empowerment component.
The various components of the “Interaction Orientation” approach are as follows. (i) Customer capacity is the belief that the individual customer is the unit of every marketing action or reaction. (ii) Interaction Response Capacity is the degree to which a firm can provide successive products or services based on the previous feedback by a specific customer and all other customers. (iii) Customer empowerment is the extent to which customers connect with the firm and other customers in collaborating and sharing information, praise and criticism about the firm’s products and services. (iv) Customer Value management is the extent to which a firm is able to quantify and calculate the individual customer value and reallocate it s resources to higher value customers based on this evaluation.

By adopting these measures, firms can customize their products and services by better understanding the needs of their customers. This leads to increased customer satisfaction, generates positive word-of-mouth, and leads to acquiring and retaining profitable customers.