Within customer relationship management, a customer value model (CVM) is a data-driven representation of the worth, in monetary terms, of what a company is doing or could do for its customers. [1][2][self-published source?] Customer value models are tools used primarily in B2B markets where the choice of a given product, service, or offering is based primarily upon the amount of customer value created. Customer value is defined as value = benefits minus price. Thus, customer benefits are quantified in a CVM; product features and capabilities are translated into dollars. Customer value models are different from customer lifetime value models, which seek to quantify the value of a customer to its suppliers.[citation needed]
Many firms have been reported to use customer value models,[3] including General Electric, Alcoa, W.W. Grainger, Qualcomm, Sonoco, BT Industries Group, Rockwell Automation, and Akzo Nobel.
There are several methods and approaches used to create customer value models. All of these approaches appear to depend on substantial customer interaction and on-site interviews and observations of customers' challenges related to the product or service being valued. The CVMs are of varying complexity. One consulting firm has found it useful to reverse-engineer customer P&Ls (profit and loss statements) to establish a clear connection between the product benefits and the customer bottom-line.[4]