CR2M - an approach for capacity control considering long-term effects on the value of a customer for the company

In the last years, customer centricity has turned out to be a promising paradigm for maximizing corporate value by increasing value contributions from customers. In this context, the discipline of revenue management provides plenty of methods to optimize (predominantly short-term) cash-inflows from customers. However, the paradigm of a value-oriented management requires the integration of perspectives from revenue management and customer relationship management: When controlling scarce, inflexible capacity, the effects of the acceptance or denial of a customer request on the value of a customer for the enterprise have to be considered. Hence, this paper proposes a model for a customer lifetime value-oriented capacity control by allocating scarce resources to products for different customer segments combining methods from both revenue management and customer relationship management-termed CR2M. The model presented in this paper at the same time allows a transparent calculation of opportunity costs caused by a short-term oriented control mechanism. In order to illustrate the applicability of the model, a company of the semiconductor industry serves as example.