Marketing: What is Customer Value?

What are some critical questions managers ask?
What is important to our customers?
How do I know if I’m delivering value to my customer?
How do I judge if we are offering superior value relative to competitors?
This is the customer’s perception of what they want to have happen in a specific use situation with the help of a product or service in order to accomplish a desired purpose or goal.
Customer Value
From what perspective are we defining customer value?
Customer’s
This is about falling short or exceeding expectations (how the product performs relative to expectations)
Customer Satisfaction
Customer Value =
Importance
Customer Satisfaction=
Performance
Customer value is a tradeoff of
what I get (benefits) and what I give up (sacrifices)
What is the customers objective is
to maximize X after subtracting sacrifices from benefits compared to alternatives.
This is the interaction between the buyer’s goals and values, the use situation, and the product and service.
Value Judgment
Customer value is goal driven by
attributes, outcomes, and goals
Based on the value Hierarchy, these are a part of the customer’s world
Customers goals and purposes
Customers desired consequences ( what I want to happen)
Based on the value hierarchy, this is a part of the marketer’s world
Product attributes (physical product/ service characteristics)
Customer value is dynamic in that
it changes over time
What makes customer’s perceptions of Value change?
Environment
Life changes
Company changes
Technology changes
In Summary, these are the 5 Key Aspects of Customer Value
Customer Value is…
A tradeoff of benefits and sacrifices.
An interaction of both customer and product
Is relative to competitors, individuals, and situations
Goal driven by desired attributes, outcomes, and goals.
Dynamic in that it changes over time.
What are the characteristics of a customer value oriented firm?
Everybody is committed to providing value to customers (“Customer Value Culture”)
They have a commitment to innovation
Organize everything they do as a company around delivering customer value
They have continuous learning about customers.
What are some forms that Customer Value Learning take?
Value Hierarchies
Value Maps
Other analytical tools
What are some customer learning methods?
Customer interaction (sales call reports, presentations)
3rd party customer research (consultants)
Customer research (interview, survey)
SECONDARY reports (journals, industry reports)
Analyzing market trends (sales data)
Analyzing customer complaints
Mining customer databases for buying patterns, market segments, changes in buying patterns
This is the first step in the Customer Value Strategy Process
Identify the value
This is the second step in the Customer Value Strategy Process
Choose the value
This is the third step in the Customer Value Strategy Process
Provide value
This is the fourth step in the Customer Value Strategy Process
Communicate the value
This is the fifth step in the Customer Value Strategy Process
Assess Delivered Value
The bottom line of customer value is that…
customers are more demanding than ever
By better understanding customer value, we can develop better strategies to:
Satisfy and retain customers
Aquire New customers
Differentiate the firm from competitors in the marketplace.