What is "customer value"?

What is "customer value"?

1. January 23, 2017Copyrighted in its entirety, Innovative Learning Solutions,

2. How Business Often
Understands Customer Value
Customer Value as Economic Worth
Value is built into a product or service in the form of
attributes and features
Value is the price that they are willing to pay
Value is the cost of the attributes and features built into
the product
Value is the net difference between what a customer pays
for a product and the benefits received

3. Understanding Customer Value
Excerpt from a transcript of an in-depth interview with a women discussing
her car:
“Well, there is no play in the steering wheel. When you turn, you turn. You
can hold it steady on the road with one finger. As far as safe. In the rain, I
guess is what gets me. I don’t drive that often in the snow. But in the rain.
Course, I know it has a lot to do with your tires. But its a heavy, you know,
good heavy car. To where, you know, I have two kids in the car, and I don’t
feel you’re going to slide all over the road.”
Excerpt from a transcript of an in-depth interview with a man discussing
membership at a health and physical fitness center:
“I think we’re getting our money’s worth. You know, if we were not using it, I
would not be very happy with spending the money that we are spending on
the membership. But we are using it a lot.”

4. Customer Value Hierarchy
Product/Service
Attributes
Describes the product/service
Use Consequences
Describes the user/product interaction
(benefits in use)
Desired End-States
Describes the goals of the customer
Source: Woodruff and Gardial (1996)
Use Situation

5. Customer Value Hierarchy For
Customers of Physical Fitness Center
Sense of
Accomplishment
General Feeling of
Healthiness
Convenience
Consistency of
Use
Versatility of
Facilities
Freedom from
Health Worries
Able to
Concentrate on
Workout
Not Bored With
Routine
Location
Hours
Open
# of
Machines
# of
Activities
Friendly
Desk
Person
Clean
Pool
Desired End-States
Consequences
(benefits in use)
Attributes

6. What is the Value of a Cell Phone?
List all of the features that you like about your phone
Why do you like these features? What is the benefit to you?
Do any of the features cause you problems or cost you
money?
Ultimately, what is the real reason that you have a cell
phone? What is its value to you?

7. What is the Value of a Cell Phone?
List all of the features that you like about your phone
Why do you like these features? What is the benefit to you?
Do any of the features cause you problems or cost you
money?
Ultimately, what is the real reason that you have a cell
phone? What is its value to you?