We estimate customers value to represent as much as 80% of company value in the Finance 2.0 arena.
In this world, new companies are generating very large market value pools. Raising opportunities for new debt & equity, based on current company valuation.
With companies relying ever more on intangible assets, this valuation may be highly volatile. Specifically because it is tightly linked to a single component, itself highly volatile : customers value.
This is particularly true in the Finance 2.0 arena where we estimate customers value to represent as much as 80% of company value.
Now, why is the customer value so volatile ?
What litterature tell us is that 3 components are driving companies value through the customer value :
- Value equity
- Brand equity
- Retention equity
When adapted to Finance 2.0 players, these components of value do fit perfectly in most succesful strategies that were observed lately. It is also important to notice that sucessful players have been good performers an all three areas. This is because customer value components are multiplicative factors; as to say, if one component is poor than the whole customer value is poor
For example, Lendingclub‘s finance 2.0 champion has consistently applied these principles and maximizing customer value. They achieved fast growth and strong valuations through competitive interest rate, excellent customer experience, a very recognized and active brand and customer retention through effective reinvestment plans.
For your finance 2.0 business, the main questions will then remain :
- How does your companyoffer the best product value ?
- How does your company build a strong brand ?
- How does your company ensure customer loyalty ?
For more info, see book from Rust, Zeithaml & Lemon “Driving customer equity“
