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What is Customer Value?

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Customer value is the worth, importance and utility of a product, service or experience to the customer.

Customer Needs

Customer needs are the foundational basis for customer value. If you need something, it has value to you. For example, a customer who needs curtains that look bright and cheery but totally block out the sun in the morning.

Customer Preferences

Customer preferences are likes and dislikes that influence customer choices and satisfaction. For example, a customer who prefers curtains made of organic cotton as opposed to synthetic materials. A customer may place a high value on a product that suits both their needs and preferences.

Customer Perceptions

Value only exists as it is perceived by customers. As such, marketing efforts that build positive perceptions of brand image, reputation, quality and customer experience can increase customer value. For example, two curtains may fulfill the same need but one may be perceived as a luxury item and the other as cheap.

Value vs Price

Value is the worth of a product or service to a customer based on their needs, preferences and perceptions. Price is the actual cost to obtain the product or service in a market. Generally speaking, customers will only buy if they believe that value is greater than or equal to price. A firm that offers far greater value than price can expect high sales volumes.

Customer Expectations

Before purchase, a customer estimates value based on information such as marketing, product reviews and word of mouth. A customer who makes a purchase does so with a set of expectations. When value falls short of expectations, the customer will be dissatisfied and may share their negative experience with others.

Customer Value Analysis

Customer value analysis is research designed to model and measure the value of your products and services. This may be benchmarked against the value offered by the competition.

Customer Value Management

Customer value management is the repeated process of measuring your value to customers to identify strengths, weaknesses, opportunities and threats in your markets. This can be used to drive product development, branding, promotion, distribution and sales.

Customer Value Proposition

A customer value proposition is a marketing message that pitches the value of a product or service to the customer. For consumer goods, this may highlight things such as usefulness, convenience, comfort, quality, performance, social status and customer experience. For business goods, a customer value proposition may pitch return on investment and competitive advantage.
Overview: Customer Value
Definition (1)
The worth, importance and utility of a product, service or experience to the customer.
Definition (2)
The worth of a product or service to a customer based on their needs, preferences and perceptions.
Related Concepts

Customer Experience

This is the complete list of articles we have written about customer experience.
Bliss Point
Brand Awareness
Choice Architecture
Critical To Customer
Brand Legacy
Customer Advocacy
Brand Loyalty
Customer Interactions
Customer Issues
Customer Journey
Cost Of Poor Quality
Customer Motivation
Customer Perceptions
Curiosity Drive
Customer Success
Customer Wants
Customer Convenience
Customer Expectations
Design To The Edges
Customer Is Always Right
Engagement Data
Experience Age
Experience Economy
Journey Map
Experience Goods
Lifetime Value
Feature Fatigue
Customer Marketing
High Touch
Lead Users
Customer Preferences
Customer Relationships
Customer Satisfaction
Moment Of Truth
Customer Service
Nudge Theory
Service Principles
Peak Experiences
Customer Value
Service Experience
Service Quality
Experience Quality
Experience Sampling
User Intent
Fit For Purpose
Internal Branding
Perceived Value
Product Design
Product Differentiation
Types Of Quality
More ...
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