How to Perceive Customer Value

"Not everything that matters can be counted. And not everything that can be counted matters" (Einstein)

Build a customer-centric business is in every forward-thinking organization’s agenda, but how can you measure Customer Value effectively? Does a product or service represent the total value seen by the customer? Wouldn't there be subjective as well as objective components of measuring customer value?

“CVA” Factor: Customer value is realized when the product or service is experienced. The essence of customer value in use basically says that customers purchase something to solve a problem or somehow create new value for themselves; one measurement "Customer Value Added" (CVA) does take the average perceived worth of a companies’ products and services divided by the average perceived worth of competitive offers. Customer value shall not only be measured based on the product or service, but also upon the overall total experience, timing, digital touch point are all important, say, product is great, but customer didn't like it being delivered a day late.

There’s measurement discrepancy between what matters for business and what matters for the customers: The cycle of purchasing a product/service through to perceived value, retention and time in whatever business unit, the dollar value and strategic value where Executives focus should be counted, however it happens at the intermediary phase. There’re also indirect factors beyond products or services, for example, a company’s branding could affect the value a customer feels toward the company or the company’s product or service. Measuring the total customer experience adds to the propensity for a given customer to provide business the opportunity for future purchases, it may not have so much value for the customer as it is for the firm. Service and Support are critical functions for connecting with, educating, obtaining vital business intelligence and creating value for customer, business and employees.

Process and measurement improvement: The customer centric organization has the ability to capture what's going right, not so right, customer trends, insights and where improvements are needed. They continue to question: How do we structure the intermediary organization to create availability of the customer value related data in a manner and method that allows the business to remove barriers to success before we have failed to deliver? What framework must be in place to ensure we capture the customer experience as they funnel through the business? In a business, all the principals must have similar core values, either being customer-centricity or employee satisfaction: they do not need to be “identical”; but if there are major differences in key areas they will inevitably cause conflict.

There are both objective &subjective component, and direct & indirect factors to measure customer value effectively, the point is to understand customers with empathy and perceive customer value based on customer experience life cyle, and multi-faceted metrics.

Posted in: Customer Service