CVA® Methodology

Based on his background in the disciplines of economics, marketing, finance, and statistics, and his long experience working with numerous organizations on their marketing and branding strategies, Don Sexton has developed proprietary methodology based on a metric CVA® (Customer Value Added) that provides managers with steering control – the ability to predict, with high accuracy, revenue and contribution from marketing efforts before those actions are taken.

CVA® methodology enables managers to:

• Estimate the return on brand-building efforts and the current dollar value of brands.
• Screen new products and services without costly and time-consuming research.
• Evaluate the impact of public relations activities on profits and growth.
• Evaluate and integrate customer communications to drive business objectives.
• Understand pricing and manage price to increase cash flow and grow or maintain share.

Customer Value Added (CVA®) is the difference between perceived value – the maximum a customer will pay for a product or service – and the incremental cost of providing that product or service.

Customer Value Added is the net value that an organization provides society – as perceived by customers. The higher CVA, the more contribution an organization can expect; the lower CVA, the less contribution. If perceived value falls below incremental cost, then CVA becomes negative and an organization will go out of business because it is using more of society's resources as inputs than it is producing as output.

CVA is a leading indicator of contribution. Both theory and empirical works demonstrate the relationship between CVA and future contribution. CVA is a practical tool, proven with clients, that can be used to evaluate marketing expenditures in terms of their expected financial results.

If you want to obtain steering control over your marketing and branding decisions and know their financial returns before you take action, contact Don Sexton and the Arrow Group and learn about CVA® - the most important metric you've never used.