Value has many different meanings. To some Value
means price (what is the value of this car?) to others it means benefit (the
value I got from this car). It also means the worth of something. That is why
you hear some people saying “value for money” (meaning they are price
sensitive); and others who prefer “money for value” (meaning they are willing
to pay for what they consider as benefits, as from a brand or a better product,
or more convenience etc.)
The dictionary meaning includes: The regard that
something is held to deserve; the importance, worth, or usefulness of
something. Synonyms are: merit, worth, usefulness, use, utility, practicality,
advantage, desirability, benefit, gain, profit, good, service, help,
helpfulness, assistance, effectiveness, efficacy, avail, importance,
significance, point, sense.
No wonder, the reader is confused about the value
word that s/he uses so often. When used in the vernacular it does not matter,
but when used as a technical term, like Customer Value, the meaning of Value
must be precise, so that everyone understands what it means, as shown below:
Customer
Value is the perception of what a product or service is worth to a Customer
versus the possible alternatives. Worth means whether the Customer feels s/he
or he got benefits and services over what s/he paid.
In a simplistic equation form, Customer Value is
Benefits-Cost (CV=B-C).
What the Customer pays is not only price (cash,
cheque, interest, payment during use such as fuel and servicing for a car) but
also non-price terms such as time, effort, energy, and inconvenience).
The benefits include the advantages or quality of the
product, service, image and brand of the company or the brand of the product,
values, experience, success one gets in using the product and so on.
Values are distinct from Value (the plural of value
as defined above is Value). Values are what someone or a firm stands for:
Honesty, morals, ethics, sustainability, integrity, trust.
Consumers are distinct from Customers. Consumers use
the product or the service, but in all cases do not buy the product/service. The
value the consumer perceives influences the buying evaluation and perception of
the decision maker or the Customer. The Customer is someone who buys or makes
the decision to buy. A Non-Customer is someone who could buy from us, but is
buying from someone else.
How is Value Created and What Does It Do?
Value is created just as much by a focus on processes
and systems as much as it is by mind-set and culture. Mind-set and culture are
much more difficult to change, and also difficult to emulate. It is easier to
copy products and systems than to change mind-sets and culture. Therefore, for
long term success, mind-set and culture are important and lasting. These, along
with systems create great experience and value.
Value changes during the use of a product or during
the Customer Journey. Value is perceived during the purchase intent, the
shopping, the actual purchase or buying, the installation or start-up, the use
and even the re-sale. We sometimes call this the waterfall of needs. Needs
change during the Customer Journey.
Creating Customer Value increases customer
satisfaction and the customer experience. (The reverse is also true. A good
customer experience will create value for a Customer). Creating Customer Value
(better benefits versus price) increases loyalty, market share, price, reduces
errors and increases efficiency. Higher market share and better efficiency
leads to higher profits.
You first have to understand the Customer Value
concept, what a Customer perceives as value, and how a customer’s value needs
change over time, and how to get Customer feedback. You must realise that
people buy a product or service that creates the most value over
competing options.
To create real value, you must recognize what a
Customer perceives as value. You must understand how the Customer views your
competition’s product. What is important to the Customer in his buying
decision? Is price more important or are benefits? Are you good at delivering
what the Customer believes is important? Are you able to deliver more than your
competition on these factors?
I understand these are general terms, but they will help you to create value as you understand your Customer’s need and perceptions. Let us take some examples on how to create Customer Value:
1. Giving a price that makes the Customer believe he
is getting more than he pays for the benefits he gets versus competitive offers
2. Reducing the price, or keeping the same price and
giving something extra over competition (this could be service, better
attention, an add on to the product)
3. Making it convenient for the Customer to buy, and
how he wants to buy and pay.
4. For B2B getting a proper price justification, not
just a price.
5. For dealers, the feeling the company will grow and
offer new products for the dealers to sell. These are things that the dealer
may not have an experience of, but needs to Create Value
6. The image of the company, including the brand and
the trust in the company or when the Customer appreciates the Values of the
company including sustainability. These create Value for the Customer
7. Giving the Customer a product that works as it is
meant to (as perceived by the Customer) and easy for him/her to understand and
use (so that no unnecessary time or energy has to be expended)
8. Making the Customer feel valued. For example:
·
Smiling at and
being attentive to a Customer creates value for him. Ignoring him/her destroys
value for the Customer
·
Making it easy for
the Customer to contact the company, and an assurance that an answer will be
given when and how promised (how many times do you have to wait to talk to
someone and how often does s/he promises to call back and how often do you get
a call)
·
Not making you
repeat questions or answers, and keep relating the problem
·
Receiving a call
from a service person confirming his/her visit (the Customer is not kept
wondering whether the service visit will take place)
·
Not answering
queries destroys Value
All readers have real life examples of Value creators
and Value destroyers and can add many more examples. Do add yours. Answer the
following:
·
What could I do to
create Value for my Customer?
·
What can destroy
Value for my Customer?
·
Does experience
create Value?
·
List things that
you do not experience that can create Value for you.
· Do I look for and solve customer problems not only one by one but also systemically for all customers having same problem.
* Gautam Mahajan is the President of the Customer Value Foundation and the Founder Editor of the Journal of Creating Value, jcv.sagepub.com. He may be reached at: mahajan@customervaluefoundation.com . Article reprinted with permission of the author (218,740 views in Customer Think plus 27,529 downloads in 2021 at Journal of Creating Value alone). Contact Gautam.mahajan@gmail.com for comments.
Learning about customer value was pretty eye opening to me. I took a lot from this writing that could help me open a business one day. Understanding how to price something based on more than just the cost of production is clearly important.
ReplyDeleteAs an entrepreneur, I have always strived to grow my knowledge in customer value, whether that's through studying competition, or going by my own experiences with companies as a consumer and seeing what my perspective is on customer value and applying it. This article helped me understand the concept of a needs based timeline and how consumers evolve in the market space. In that sense, value may differ based on the context in time.
ReplyDeleteThis post was especially helpful in understanding customer value, and how it differs from values. The tips given to create value are very thorough and useful for business to consider in order to create customer satisfaction. I believe value can be destroyed if the customer feels disconnected from the company. This can happen if the company does not instill trust in the customer or if the product does not fulfill the expectations the customer has for it.
ReplyDeleteThis post went into great detail about what value really means. It can vary from meaning the importance of something to the benefit you get from it. While customer value is the perception of what the product or service is worth to them. This article gives great real business examples of what customer value can look like and gives the reader good questions to think about for their business.
ReplyDeleteThis article helped me as a marketer realize how to create real value. As a marketer it would be my job to make the product that holds high value as well as recognize and take into consideration what the term "value" means to a customer. This article also helped me understand that value can change when you purchase, resell, intend, shop, buy, install or use, you perceive value.
ReplyDeleteThis article perfectly explains how to add value to your brand. Not only does it explain what customer value is, but it also gives examples of how to create customer value. I, for one, can remember having encountered a worker that did not give me their full attention to help me solve my issue or make a purchase. I have also found that some companies make contacting customer service unnecessarily difficult. Those two scenarios are examples of companies failing to create value for their customers. Another important takeaway from this article is knowing how to price an item based on the benefit the item gives the customer, not the cost of making the item.
ReplyDeleteValue is tough to pin down for products. As said in this article value is different depending on peoples values. Around the world different cultures raise people to have different values so value is up to the consumer. Making something that is of value to all people is almost impossible. So making the customer feel valued is businesses best way to create value for everyone.
ReplyDeleteReading this article really showed how important customer value truly is. Creating real value in your business is rare to come across. I think this article perfectly explains the importance of adding value to your brand and how to do so. This article helped me understand the difference between value and customer value which I think will benefit me in the future with a degree in marketing.
ReplyDelete“Reading this blog post emphasized the importance of customer value to a business. The author distinguished customer value vs. value and illuminated how it can impact a business. This post was eye opening and can be used in the future as a marketing team member to provide benefits to a company just by adding some sort of customer value. Adding customer value can positively impact your business and this post explains why perfectly.”
ReplyDeleteThe article provides a clear explanation of customer value and its importance for businesses. It offers practical tips for understanding and improving customer value, such as using customer feedback to tailor products and services to customers' needs. However, it would have been helpful to include examples of companies that have successfully implemented these strategies to enhance customer value.
ReplyDeleteCustomer Value is a topic that is extremely broad but it seems straight forward at the same time, which can be extremely confusing. However, after reading this blog post it not only supplies what Customer Value truly is. But it also give us a better understanding of what Customer Value means textbook wise in addition to the understanding of Customer Value pertaining to the author. In my opinion Customer Value means not only the price the customer provides in paying for a product, but the value they provide when taking time from their day to support what you have to offer.
ReplyDeleteThe solution to the commercial and financial problems that certain firms faced as a result of covid is covered in great length in this article. Companies who surmounted these challenges did so by adapting to the new and difficult market conditions and by placing their consumers first. Understanding what clients wanted and needed was the key to allowing certain businesses to thrive while the others perished.
ReplyDeleteThis article helped me view the different components that go into what a costumer pays for a service or product. Which aside from cash also includes "non-price terms such as time, effort, energy, and inconvenience" mentioned in this article. Which can become really important when looking at different alternatives and pinpointing out the value and characteristics of each option.
ReplyDeleteThis article brings a clear explanation for how to win over customers. Customer is Cash is a key phrase in this because if you have returning customers that value the company's service and prices, then you have a consistent return on investment, the investment being increasing customer value through service and benefits. Although your price of one item is cheaper than your competitor, if it brings more customers, then you will have a higher profit in the long run.
ReplyDeleteThis article explains why and how it is important to win over customers by increasing customer value. My parents own multiple 7-Eleven Convenience stores and they always emphasize giving 110% service to customers because it is essential that you have repeating customers to increase value of the business. This post can be used for businesses struggling with customer value. It is important to understand that if you have to decrease prices to increase customer value, that it is not a bad thing as it will be beneficial in the long run through consistent customer return.
ReplyDeleteThis article was extremely informative as it truly emphasized how important a single factor "customer value" plays a role in making decisions for an organization. I know that this information will be valuable in most aspects of life, especially in business. I appreciate the real life anecdotes when explaining specific ways to create value in an organization.
ReplyDeleteWhat is customer value? That is question that can lead to a variety of responses, but this article helps you understand the specifics and simplify it as well. Customer Value is Benefits-Cost (CV=B-C). This basically means that what customers consider to be of value, is the cost, subtracted from its benefit. The creating the value in which we all want and seek, the customer satisfaction increases overall. This is the ultimate goal. Keeping customers happy, and by having them be repeated customers, and not just consumers. Great customer service, friendly, and by making them feel valued.
ReplyDeleteThis article poses the question of what is customer value, and how can you increase it. Well this question can lead to a variety of responses, but as you r
ReplyDeleteContinue to read, you will see that it is a pretty simple question, and answer. To simply put it, a short formula was created, Customer Value is Benefits-Cost (CV=B-C). This just means customer value is the cost subtracted from the benefit. Customers want to feel like they are benefiting from their purchase. Their satisfaction will increase when they are greeted with smiles and a welcomed feeling. From there you will get repeated customers instead of consumers.
To add to customer value, companies need to focus on delivering superior benefits to customers while minimizing the costs that customers incur. The examples that Mr. Mahajan includes in this post can help a business thrive and keep customers happy.
ReplyDeleteThis is a pretty great article about the importance of customer loyalty and how to gain and maintain an audience. The life blood of a company is have returning customers, "Customer is Cash", and having a consistent cash flow for investment. Some of Marketing and Business is people pleasing.
ReplyDeleteIncreasing customer value is crucial to a successful company. I like how you highlighted how companies can create real value for their customers by offering competitive prices, providing excellent service, and being attentive to customer needs.
ReplyDeleteThis article helped me in making key distinctions between certain keywords such as consumers, customers, and non-customers. By viewing and understanding these differences I am able to understand and learn what value is, how it is created, and what it does. The article was also very insightful in showing the breakdown of customer value and how the “value” of a product or service itself is so much more than general production cost.
ReplyDeleteTo create Value for my Customer, I could focus on understanding their needs and expectations from my product/service and strive to exceed those expectations. Regular feedback sessions and surveys can prove useful in gaining insights into these areas.
ReplyDeleteI completely concur that problem-solving for customers needs to be done in a systematic manner rather than just on an individual basis. It's crucial to recognize common problems and put remedies into place that can stop them from happening again. By preventing recurring and similar problems, preventative actions frequently offer long-term value and save resources.
This article on customer value creation was both thorough and insightful. Understanding that customer value is best defined as benefits minus the costs involved to acquire and use products or services, it is also evident that customer value changes from one individual or user to the next to some extent. Likewise, the description of the “waterfall of needs” describing how customer value changes throughout the customer journey further highlights the dynamic nature of customer value. That being said, it seems critical that companies engage customers regularly to attain input and feedback. Information about each step of the customer journey should be collected since this will identify potential areas where customer value can be enhanced. These pursuits as well as consistency, respect for customers, and attentiveness to needs will help build trust and brand loyalty as efforts to increase value occur.
ReplyDeleteCustomer Value seems very minor but also is very important, and can be very confusing. After reading this blog not only did I learn what customer value is but also how it relates to the author and possibly other people. I've learned that the customer pays for the value of the product, because of how the product benefits the customer.
ReplyDeleteReading this article really brought clarity to how to win over a customer. I was able to see different elements that go into what a customer pays for and aside from the product itself, the consumer also pays for time, energy, effort, and inconvenience. This is important when trying to win over a customer because every company wants loyal clientele/customers so you do this by making the customer feel valued and earning their trust into believing your product is better than any on the market.
ReplyDeleteCustomer value is created based on their mindset, culture and experience. In order to capitalize on these different aspects, businesses must asses their demographics and trends from consumers and customers. It is detrimental that feedback and consumer behavior is analyzed to figure out the value of a product and how to increase it. This will also help business build brand loyalty and be able to adjust their marketing and distribution of goods.
ReplyDeleteI like how you highlighted the simplest way of expressing customer value by CV= Benefits- Costs. Made everything very clear and easy to read. Learning how to increase customer value is very beneficial for the success of a company.
ReplyDeleteReading your article I gained a better understanding of what customer value is and how it can benefit the customers and the service. You mention how the customer is not just always paying a price it could also be paying time or energy as well. The benefits also have many different factors to it towards the customer, not all customers are the same so they can each be gaining different benefits. After reading your article I definitely have a more detailed perspective on customer value in today's economy.
ReplyDeleteI think that the blog's goal—which is to precisely and thoroughly detail the various facets of Value and its traits that pertain to both consumers and customers—is comparable to a customer's mental blueprint, which business owners can utilize as a guide. The author's emphasis on value, which can encompass more than just financial rewards to the client, was highly praiseworthy. It is equally crucial to recognize and educate ourselves about the other contributing aspects.
ReplyDeleteTo create value for your customer, it's crucial to start by thoroughly understanding their unique needs and preferences. This lays the foundation for offering products or services that provide clear benefits and advantages. Additionally, providing exceptional customer service, including timely responses and assistance, goes a long way in building trust and loyalty. Offering competitive pricing or unexpected perks that surpass customer expectations can also significantly enhance perceived value. Moreover, actively seeking and incorporating customer feedback into your offerings shows a commitment to continuous improvement. On the other hand, potential value destruction can occur through poor quality products or services, inattentive or unresponsive customer service, inconsistencies in pricing or service delivery, and a lack of transparency or honesty in business practices. Beyond individual experiences, recognizing and solving recurring customer problems on a systemic level demonstrates a proactive approach to value creation, benefiting a broader customer base.
ReplyDeleteAs a entreprenuer learning to create customer value, one must understand the concept of what customers perceive as valuable and how their needs evolve over time. Reading this has helped me learn it's essential to gather customer feedback and recognize what's important to them in their buying decisions. This involves factors like pricing, benefits, and convenience, as well as building trust and portraying a positive company image, which can all contribute to creating value for the customer.
ReplyDeleteI found your article very interesting and insightful, as the word "value" can have various meanings and could be understood differently by certain people. I gained knowledge on the different meanings of the word and how value is seen in customer service and the importance in it. I found that the examples given on how to show value were the most important, as it allowed me to keep some in mind for future use.
ReplyDeleteThe article gave me a deeper perspective on value and how value looks different for everyone. Value is significant regarding customer satisfaction and feeling the customer's needs. The article discusses how value constantly changes for customers; using what customers consider valuable continuously evolves over time. Using this information to utilize customer feedback will help companies stay updated with the customer's needs and what they value as valuable. Using feedback from consumer reviews will help companies compete with competitors while better satisfying their target market.
ReplyDeleteIt's critical to understand the difference between cost and value as well as the significance of accuracy when using technical phrases like "customer value." The focus on generating pleasant experiences, comprehending client perspectives, and methodically resolving issues deepens the conversation. A great read for anyone trying to improve their connections with customers and provide value to their products over time.
ReplyDeleteI admire how you began the article with the different meanings of value, whether it's the price of something that creates value or the benefit of something that comes with value. My initial thought goes to the price of an item or how much its worth, but this article really expanded the meaning of value to me!
ReplyDeleteI like how the article goes into depth on what value truly is and when applied how it can benefit a business. The value of customer service as well as the value of a product is crucial and can mean the difference between a customer staying loyal or a customer scouting out another company for better. I believe that in my line of work I provide immense value to the company so I can relate to what the author is talking about when distinguishing the different kinds of value. I appreciate the author giving someone who is in an employee or a member of management a list of ways to bring forth value to the customers.
ReplyDeleteI enjoyed reading this post about customer value because it helped me understand customer perceptions differently. I recently began a new job as a social media specialist and I want to ensure I am satisfying viewers and engaging with them. I want our followers and clients to feel like they are valued, and vice versa. Although our services are not priced or for monetary gain; therefore, the price aspect of value does not apply, we do offer quality service and ensure that customer perceptions are going well.
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ReplyDeleteI appreciate your comprehensive and insightful exploration of the concept of value, particularly in the context of Customer Value. Your breakdown of the various meanings and interpretations of value, as well as the distinction between consumers and customers, provides a solid foundation for discussing how businesses can create and enhance value.
I enjoyed reading this article. I like how it started with the definition of the word "value," as this made it clear on what its meaning is in the content of marketing and consumers. I also really like the author's step-by-step analysis of the different factors regarding customer value/ satisfaction as it gave a great breakdown and analysis. As someone who has experience on both ends, I strongly believe customer service is very important and can add value to any product a customer may be considering to purchase. It can sometimes be the reason why a customer is loyal to a company or product, or maybe grow a dislike for a company and product. I also am a strong believer in making sure ease of use is present when a customer is purchasing a product, as, from personal experience, I can relate to how likely I am to purchase a product or service based off of how easily I can understand how to use it, and how it can help me. The reflective questions at the end are also nice, as it helps relate the article to the reader's experiences.
ReplyDeleteThe article provides a comprehensive exploration of the multifaceted concept of value, distinguishing between its various meanings, especially when applied in a technical context like Customer Value. The equation CV=B-C captures the theme, emphasizing that customer value is determined by perceived benefits relative to costs, which extend beyond monetary means to include time, effort, energy, and inconvenience. The practical insights on creating real value, such as understanding customer perceptions, offering competitive advantages, and prioritizing customer experience, contribute valuable guidance for businesses aiming to enhance customer satisfaction and loyalty.
ReplyDeleteThis article truly touches on how customer value can be established and benefit businesses. It allows for the development of loyalty towards that product and company, creating a bond like no other. The overall experiences and benefits a customer can obtain through the company with courtesy and kindess while guiding them through the buying process when needed is helpful.
ReplyDeleteThis blog article explores the many meanings of "value," ranging from cost to value and worth. It explores the concept's complexity. It highlights how crucial it is to define value precisely, particularly when using technical terminology like "Customer Value," in order to guarantee comprehension and clarity. The post offers insights into the elements driving customer decisions and the distinction between consumers and customers by offering a framework for defining Customer Value as the sense of worth in relation to alternatives. It also discusses how value is created by combining systems, culture, and attitude, emphasizing the part these elements play in providing outstanding customer experiences.
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