Customer Value

Ayana Yensebayeva
What Is Customer Value?

• Customer value measures a product or service's worth and compares it to its possible
alternatives. This determines whether the customer feels like they received enough
value for the price they paid for the product/service.
Customer Value Defined

• In every buying decision, a consumer asks the question: 'is what I am going to receive
worth what I have to give up in order to get it?' The gain the consumer receives for the
benefit is weighed against the cost the consumer must pay to acquire the benefit. The value
the individual consumer places on a product or service becomes the customer value for
that offering.
• Every consumer has a unique set of needs and resources, so no two consumers will place
the same customer value on the same product or service. The highest-quality product or
service does not always provide the highest customer value, since the benefit of each item
is measured against the cost. Some consumers are willing to pay a high price for a quality
product or a high level of service, but others will make the decision that the same benefits
are not worth the price.
Why is customer value important?

• Satisfaction. The main reason customer value is important is because it affects

customer satisfaction.
• Market position. By creating superior value, your company can encourage your
customers to be loyal. It is also the reason competitors’ customers switch to your
product. But, customer value also depends on the available alternatives. Customers have
several product choices. When they buy, they will compare these products. If your
product provides better value, they will, of course, choose your product.
• Secure money. Because competition in the marketplace is dynamic, the relative value
you provide can also vary, even as you maintain your current edge. For example,
competitors innovate to improve their products. In the end, customers choose them
because they are considered to provide a better offer.
What does value mean to people with regard to an
automobile and how do the manufacturer and dealer
create such value?
• Value including safety, reliability and comfort. Manufacturing vehicles that excel in
these three areas is what they deliver on.
• For a different customers with respect to the age. This can be explained as below:

1. A very young adult will look for power and speed in the automobile.

2. A young adult would look for the latest technology in the automobile.

3. A middle aged customer will look for more mileage.

4. A middle to senior age customer will look for new design and cost