What Is Customer Value
In business world it is rightly said “Customer is your King”. Customer Value can be defined as “the amount of returns that a customer will get from a service or product relative to cost”. Today businesses, be it small or large use customer value as a part of their analysis to find out how well they are supplying their customers.
These analyses may include what kind of products or services the customer uses, what the customers does with the products or services or how they use these products. Another essential component of this analysis is the price; they have to see that the prices are set competitively. When we are talking about customer value it is important that everyone understands that customer value does not relate to the value of customers, but value the customer receives from the business.
The central question of customer value analysis should be.
Does the business offer superior value?What is necessary to offer superior value?Where is the business headed towards in the market?Does the firm strike a balance between customer value and its financial goals?
The new term is Customer Value Maximization is often used these days. It is a real time frame work of customer’s responsive towards acquisition, retention and usage that would deliver marketing returns. Now let us understand:
Real Time Framework: it’s an ongoing process achieved through marketing programs.Customer’s responsive: it starts from what the customer’s wants.Marketing Returns: This allows marketers to measure effectiveness.
Now let us understand what governor’s Customer purchase decisions:
They buy on perceived valueValue is defined as benefits relative to cost.Benefits may include non cost attributes: like Product, relationship and service.
Now let us see the Value model to understand better.
The value model helps us in understanding various quality attributes and the price ratings. These quality attributes usually have two characteristics. One is derived from customer needs and the other related to a specific process in the organization. So to achieve these things the organization to say good bye to old approaches and induct new things to derive good quality metrics to give more customer satisfaction.
Customer Value analysis allows a firm to identify where they have to strengthen its “value propositions”. It also depends on a well forecasted customer satisfaction surveys be past or present. In order to do this the business retain its customers which is called “customer retention”, the organization must strategize its customer value policies in such a way that it can retain its valuable customers for a long time. And see that customer derives more value or satisfaction from their products.