Hello, this is Matsubara, CRM Evangelist.

In the first part , we explained the essence of relationship marketing (RM) and the theoretical framework of the six market models.

In this second part, we will focus on LCV (Customer Lifetime Value) theory, another important pillar of RM, and explain in detail how EMOROCO CRM Lite implements these theories for each function.

table of contents

1. What is LCV (Customer Lifetime Value) theory?
2. Why is maximizing LCV the core objective of RM?
3. Elements that make up LCV
4. Relationship between CRM4.0's 3-axis evaluation and LCV
5.6 How to handle market models in EMOROCO CRM Lite
6. EMOROCO CRM Lite Feature Mapping Supporting LCV Maximization
7. Connecting Theory and Implementation
8. Frequently Asked Questions (FAQ)
9. Summary: A look back at the two-part series

1. What is LCV (Customer Lifetime Value) theory?

LCV (Life Customer Value, commonly known as LTV: Life Time Value or CLV: Customer Lifetime Value) is an indicator that shows the total value that a single customer (or company) brings to a company over the entire period from the start to the end of a transaction.
There are several ways to refer to it, such as LCV, LTV, and CLV, but they all refer to the same idea: "viewing the relationship with the customer not as a single transaction, but as the entire period over which the relationship continues."

2. Why is maximizing LCV the core objective of RM?

The reason RM emphasizes "relationships" rather than "transactions" is precisely summarized in this LCV concept.
The essential goal of RM is not how much profit can be made from a single transaction, but rather how much value can be created over the entire duration of the relationship with the customer.

The "1:5 rule" that I mentioned in a previous article about how to deal with existing customers.
The principle that acquiring new customers costs five times more than retaining existing customers also supports this LCV concept.
Maintaining relationships that have already been built and increasing their value over the entire period is a far more efficient growth strategy than continuously acquiring new customers one after another.

3. Elements that make up LCV

LCV is generally composed of a combination of the following elements:

- Duration of the transaction: The length of time customers continue to do business with us without churning over
• Transaction frequency and unit priceHow often and for how much money will they trade within a certain period?
・Gross profit rateHow much of the sales revenue remains as profit?
• Ripple effect from referrals: The effect of that customer referring new customers (the point of contact with the "referral market" in the 6 market model)

Of these factors, the quality of the relationship with the customer has a particularly significant impact on the "duration of the relationship."
If the relationship is good, it will last longer, but if the relationship deteriorates, they will leave sooner.

4. Relationship between CRM4.0's 3-axis evaluation and LCV

Here, we will summarize how the three axes of CRM 4.0 evaluation— nurturing score, emotional temperature, and NPS —which we have discussed so far, are related to LCV.

Nurturing scoreThis can serve as a leading indicator of customer engagement and transaction frequency by capturing the level of customer behavioral involvement.
・Emotional temperatureThis allows us to capture the depth of relationships felt by those on the ground, providing information to detect early signs of discord.
NPSThis helps predict the ripple effect of referrals by capturing whether customers would recommend the product or service to others.

In other words, the three-axis evaluation of CRM4.0 is designed to function as a leading indicator corresponding to each element that makes up LCV.
This is not a coincidence, but rather the result of translating the objective of maximizing LCV in RM theory into specific investment indicators.

5.6 How to handle market models in EMOROCO CRM Lite

The six markets in the six market models explained in the first part can be handled in EMOROCO CRM Lite as follows:

・Customer market: Managed using standard functions such as clients, projects, and activity history.
Referrer market: NPS data and entity design that allows tracing referral sources to track customers who came via referrals.
・Supplier marketApplying the trading partner entity not only to customers but also to the management of suppliers and partner companies.
Internal market : Personal Dashboard,Security RoleInternal information sharing and permission design
• Influencer market • Recruitment market: The standard features are not as comprehensive as those available in the customer market,Adding entities without codingThis allows you to extend your management capabilities by creating lists of industry experts and job candidates.

While it's not easy to perfectly cover all six market models with a single CRM, its no-code scalability allows for broader applications beyond customer markets, including relationship management.

6. EMOROCO CRM Lite Function Mapping Supporting LCV Maximization

We will organize the functions corresponding to each element that makes up the LCV.

Thus, by working backward from the single theoretical objective of LCV, it becomes clear that each function of EMOROCO CRM Lite is not merely a collection of disparate convenient features, but rather designed with a consistent purpose in mind.

7. Connecting Theory and Implementation

Many CRM tools are marketed by emphasizing that they have "lots of convenient features."
However, there aren't actually that many CRMs that can explain why that feature is necessary and what theoretical basis it's based on.

EMOROCO CRM Lite starts from established marketing theories such as RM theory, the 6 Market Models, and LCV theory, then translates them into a modern interpretation called CRM 4.0, and finally implements them as concrete software functions—a consistent and logical progression.
This consistency is proof that it is a product with a theoretical foundation, not just a collection of features.
And that isThe biggest reason why EMOROCO CRM Lite cannot be developed with AI.

8. Frequently Asked Questions (FAQ)

Q. Are LCV and LTV the same thing?
Yes.
Although the terminology may differ, both refer to the same concept: "the value created throughout the entire duration of the relationship with the customer."

Q. Do all six market models need to be managed on the CRM?
It is not required.
A realistic approach would be to start with the customer market and then, as needed, extend the management of the referrer and supplier markets using no-code solutions.

Q. How can I actually calculate the Lowest Cost of Vehicle (LCV)?
Factors such as duration, transaction frequency, unit price, and gross profit margin can be calculated from data accumulated in the CRM.
You can visualize these metrics using the dashboard feature.

9. Summary: A look back at the two-part series

In the first part , we explained the essence of relationship marketing and its theoretical scope, encompassing six market models. In the second part, we discussed LCV theory and how EMOROCO CRM Lite implements these theories.

CRM 4.0 is by no means a newly conceived concept; it is built upon the established lineage of management theory known as RM theory.
The three-axis evaluation of nurturing score, emotional temperature, and NPS is designed as a leading indicator to maximize the LCV metric, and the breadth of relationships shown by the six market models can be applied beyond the customer market through no-code scalability.
By understanding the theory behind EMOROCO CRM Lite, you can go beyond simply operating its functions and instead practice the essential creation of relationship assets.

EMOROCO CRM Lite costs ¥1,500 per user per month (minimum 3 users) and has no initial setup fee, with a 30-day free trial.https://www.emoroco.com/You can start from there.
IT implementation subsidy eligible tool number: DL07-0022934.

We also offer a monthly newsletter, "ARCUS NEWS," which provides updates on EMOROCO CRM Lite and other useful information for CRM operations.
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Additionally, we publish useful articles about CRM 4.0 on note ( https://note.com/arcuss_crm ), so please check them out as well.

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• The Science of Relationship Assetization
• CRM design to reduce customer churn
• Because it's no-code, you can customize it to suit your company's needs – What are the customization features of EMOROCO CRM Lite?