How do we differentiate our customer engagement and ensure profitability? There's an increasing trend of using applications that support customer interaction while delivering the product or service. Organisations are taking a closer look at their consolidated back-office infrastructures and harnessing the data they generate in order to better understand their interactions with their customers. The growing interest in business intelligence tools and online services such as SalesForce.com bare evidence of this trend.

Applications that support interaction with clients – particularly web-based portals which are more and more intelligent leveraging benefit from ‘mashable’ web services applications. So, as the delivery of products and services continues to move to the Internet, more and more applications will fall into this category, particularly those that ask:

    * What it will take to get customers to recognize the value of our products and services?

    * What benefits—economic, functional and emotional—will convince customers to buy our products and services?

    * What will make them satisfied enough to repurchase?

The real purpose of acquiring and retaining customers is to produce cash flow. Therefore, in the end, it is not enough to just create value to customers; we must attract and keep customers at a cost of providing value that is below the value that satisfies customers.
We achieve strategic business impact when we focus on growth in three dimensions: Customer Acquisition, Customer Profitability and Customer Retention. These link marketing to financial outcomes and growth.

Customer retention, consisting of strategies designed to limit defection, has the greatest potential to increase long-run market share and profits because its impact occurs over multiple periods. In "Managing Customers as Investments" Gupta and Lehmann explain, "while short term financial results may favor cost-cutting (e.g., reducing acquisition costs), real financial value comes from intelligent allocation of resources for improving service to profitable customers." Also, conventional wisdom has it that it costs much less to retain an existing customer than it takes to acquire a new customer.

If profit and cash flow form the foundation of firm value, it follows that customers buying products and services, the primary source of cash flow, determines firm value. Enter cash value added CVA is a Net Present Value model that stages investments to show the change in cash flow from the investment.

Bottom line, satisfied customer equals increasing cash flow over time.