MEANING OF VALUE AND HOW TO CREATE CUSTOMER VALUE. UNDERSTANDING CUSTOMERS’ VALUE
MEANING OF VALUE AND HOW TO CREATE CUSTOMER VALUE. UNDERSTANDING CUSTOMERS’ VALUE
I. WHAT IS CUSTOMER VALUE? AND HOW TO CREATE THAT VALUE?
Customer value is the total benefit that a customer receives from owning a product/service, it includes the benefits brought by the product/service, the added benefit of the service, the benefit due to the image of the seller’s brand, the benefits of a personal relationship are formed.
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Value can be understood in many different ways. For some, value means price (What is the value of this car?), for others, value means benefit (the value I get from this car?) what?). Value also means the worth of something. That’s why you hear some people say that “value is measured in money” (that is, they are price sensitive); and others prefer to say “pay for value” (meaning they are willing to pay for what they see as benefiting them, from a better brand or product, more convenient, etc.)
In the dictionary, value is defined as follows: something worthy; the importance, worth, or usefulness of something. Synonyms are: value, usefulness, use, utility, practicality, advantage, desire, benefit, profit, benefit, good, service, help, usefulness, support, effective, efficient, utilized, important, meaningful.
Not surprisingly, readers get confused when they use the word “value”. Normally that wouldn’t be a problem, but when used as a technical term, such as customer value, the meaning of the word value must be precise. For everyone to understand more clearly, customer value is defined as follows:
“Customer value is the perception of how valuable a product or service is to a customer compared to other alternatives. Valuable means: Do customers feel they get benefits and services that are commensurate with the money they spend.”
In a simple equation, customer value is calculated as the difference between benefits and costs (Customer Value = Benefit – Cost).
What the customer has to pay is not only the price of money (cash, checks, interest, usage payments like fuel and car service) but also non-price related terms ( such as the cost of time, effort and mental costs that customers have spent in the buying process).
Benefits include the advantages or qualities of the product, service, image and brand of the company or brand of the product, the value, experience, success that users have when using the product , etc.
Values (plural) is different from Value (singular). Values (principles, principles) are what a person or a company values such as: honesty, ethics, sustainability, inclusivity, trust.
Consumers are different from customers. Consumers use a product or service, but not in all cases buy that product/service. The value received by the consumer affects the perception and purchase evaluation of the decision maker or in other words the customer. The customer is the person who buys or decides to make a purchase. A customer is someone who may not buy from us, but can buy from someone else.
HOW VALUE IS CREATE AND WHAT WORKS
?Value is created by focusing as much on processes and systems as by thought and culture. Ideology and culture are much harder to change, and it’s also hard to compete. Products and systems can be easier to copy than it is to change the company’s mindset and culture. Therefore, for long-term success, ideology and culture are important and long-term factors. Ideology and culture, together with systems, help create great experiences and values.
Value changes in the process of using the product or in the customer journey. Value can be felt in the purchase intent, when shopping, purchasing, installing, using, or even buying and reselling the product. We sometimes call this the waterfall of needs model. Needs will change throughout the Customer Journey.
Creating customer value enhances customer satisfaction and experience. (The reverse is also true. A good experience also helps create value for a Customer.) Creating customer value (the benefit outweighs the price) helps increase loyalty, expand market share, increase prices, reduce errors and increase efficiency for the company. Higher market share and better efficiency result in higher profits.
HOW TO CREATE TRUE VALUE
?First, you must understand the concept of Customer Value, what the customer considers value and what the customer value needs to change with when, and how to get customer feedback. You must be aware that people will buy the product or service that creates the most value for them over competing products.
To create true value, you must be aware of what your customers consider value. You must understand how customers view your competitors’ products. What factors are important to help customers make purchasing decisions? Price versus benefit which is more important? Are you good at delivering what your customers consider important? Can you deliver more than your competitors based on these factors?
These are general terms, but they will help you create value when you understand the needs and perceptions of your customers. Let’s take some examples of how to create customer value:
Offer a price that leads customers to believe they will get more out of their money than their competitors offer. Lower the price, or keep the price the same and add a competitive advantage. for a product (maybe a service, more focus, an extension to the product)Make it easier for customers to buy, and understand that customers want to buy, want to pay.For With dealers, give them the impression that the company will develop and deliver new products to them. Those are the values that the agent will receive. The image of the company includes both the brand and the customer’s beliefs about the company or what customers appreciate about your company’s values. This creates value for customers. Provide customers with a product that makes sense (perceived by customers), makes it easy for customers to understand and use (avoid wasting unnecessary time and energy). necessary) Make the customer feel valued. Example: By smiling and paying attention to a Customer will help you create value for them. Limit things that destroy their valueMake it easy for customers to get in touch with your company and ensure when and how an answer will be given (and how long you have to wait to talk to the customer) customers and how often they promise to call and how often you get calls)Don’t repeat questions or answers, and mention the problem.Receive a call from customer serviceNon-payment Answering questions will destroy the value you build.
There are many real world examples of people creating value and destroying it. You can add more examples and give your example by answering the following questions:
What can I do to create value for my customers? What can destroy my customer value? Will experiences create value? List non-experiences but can create value.
ii. MEANING AND HOW TO CREATE CUSTOMER VALUE
Customer value is how satisfied customers are with your business. There can be several different definitions or meanings of the word “value”. For business people, “value” is often related to price, the same is true for consumers – I ask about the value of your home when you buy it, for example. Or it can also be understood as the value of something, not necessarily a tangible product. Both products and services have value.
If you provide enough value to your customers, you will have the power to promote your company to find more new customers. It is important to always provide value. –Guy Kawasaki
This is where you hear customers talk about getting value for money, often used when talking about price-sensitive customers. On the other hand, it is money for value, which means that people are willing to pay for things that they feel are beneficial for themselves.
In the dictionary, what is the interpreted value?
Mention something worthy; the importance, worth, or usefulness of something. Principle or standard of human behavior Estimating the monetary value of something Considering whether something is important or useful , or appreciate it for its usefulness.
While there are different meanings and the words can be used interchangeably, it becomes a more technical term when you are talking about customer value.
WHAT IS CUSTOMER VALUE?
Customer value is the perception of how valuable a product or service is to a customer compared to other alternatives. Valuable means: Whether the customer feels they got benefits and services for the money they paid.
That can be expressed into a simple equation below: Customer Value = Benefits – Costs (CV = B-C)
It is not a linear equation like focusing only on price because the customer has to spend more than the cash they pay on the product or service. You have to consider the time, motivation, convenience, effort and a lot of other things that they have to put in.
For customers, the benefits are also may change and lead to a change in value. The value for one customer may not be the same for another. Similarly, what is important to one customer segment may not be important to your other segment. Benefits may include:
Quality of productOwnership advantageImageCompany brand and affiliationSolutionsAssociationExperienceSuccess from using the product or serviceLong term takeaways (including knowledge)
ISSUES ABOUT CUSTOMER VALUE
Value is created through the development and improvement of processes, just like everything else in your business. It is also an important part of the company’s culture and vision. While culture and mindset can be hard to change, it’s entirely possible to set those aside for a greater emphasis on value creation and a better customer experience.
Value, or perceived value, can change throughout the customer journey. They will become aware of the value you offer when they are first introduced to your product or brand, and this will change as they begin to interact with your product, service, staff, etc. members and even other customers.
Communicating value and establishing customer value is important because the results of your efforts are measured by the customer’s perception of the value you bring to them.
Remember: your customers will never buy something because you like it. They buy because they like or need them.
It is never something you can force.
Remember the last time you decided to go out to eat without thinking about the destination. You compared the perceived value of similar restaurants while trying to make a decision. It is purely based on subjective perception.
Because it is so subjective, customer value can only be influenced – never controlled. Don’t worry too much about that. Communicating value is easier than you think, and the stronger your relationship with your customers, the greater their perceived value.
HOW TO GET MORE CUSTOMER VALUE
This is much easier than you might imagine. Your customers already know what they care about. They had subconscious and conscious controls. They already know the problems they have, and may even know the solutions they need.
You just need to understand what drives value for your customers. Good customer research, including taking surveys and talking to your customers, can uncover what matters most to them.
Tweak your VALUE DECLARATION
Consider all the businesses that are offering exactly what you offer. With similar products, customers have no choice but to choose subjectively. The value proposition is where you win. You need to communicate what makes you different, and continually do whatever it takes to help your value statement make you truly different. You can do that by:
Identify what you’re good at and own itMake your value proposition clear in all communications Ask why customers buy from you, use feedback to boost your value propositionEvaluate pricing your value with real dataCommunicate the benefits of your service so customers can see the value
SEGMENT YOUR AUDIENCE
Different customers have different thoughts about what is important and valuable to them. Instead of trying to represent the same value proposition for your entire audience, define a different value for each segment separately.
Values may vary by season, geography, demographics, or certain product attributes. Segment your audience based on their values and tailor your message to each audience. For example, what an adult considers a value may be completely different from that of a teenager.
See also: What is On Time – Distinguishing On Time / In Time
If you have a defined target market, all you have to do is put yourself in the customer’s shoes, and figure out what actions they value.
DO NOT COMPETE ON PRICE
If you try to compete on price alone with your competitors, you will lose. Cost is certainly a factor for customers, but people are willing to pay more when they can see value and feel like they’re getting what they’re worth. Satisfied customers who see so much value in your offer will not only be willing to pay more, but will be willing to talk to you.
Conversely, an unhappy customer who sees no value will go somewhere else, even if you offer the lowest price.
Set a price that clearly shows that the customer is getting value, but it also maximizes your purchase. Somewhere in the middle, but not the lowest, communication is valuable at a fair price to the customer who is comparing in shopping.
FOCUS ON PRICE CUSTOMERS YOUR BEST
You cannot spread your resources, service team, and sales force evenly across your entire customer base and expect a good return. You need to focus on the customers that provide the greatest value in return. This is another reason audience segmentation is so important.
Likewise, leverage a lot of resources towards building relationships with existing customers during the acquisition process. It’s much cheaper to get old customers than it is to attract new customers, and great service increases customer lifetime value so each customer is more valuable in the long run.
5 IDEAS FOR CREATE CUSTOMER VALUE (BONUS)
Make the value/price ratio appear larger than it is. Take it a step further, offer them a free gift, an extra service. Make them feel that they are appreciated.
Make your services or products easy to buy. Provide different methods for payment, delivery, etc.
Create a truly unique value proposition. This is especially true if you’re doing B2B transactions. Communicate with customers and state why they should buy your product and not your competitor’s.
Work with your brand. Your company name itself should be synonymous with value. Develop a unified method for dealing with your customers, handling complaints carefully, and more.
Provide outstanding customer service. At the end of the day, both your employees and customers are people. Treating them like that can be extremely helpful for both parties.
In other words, spending time researching and understanding your market well enough can help you break it down into segments, dig deep into each audience segment to understand what their most pressing needs are, and what they find valuable. Use the unifying characteristics of each segment to create a powerful value proposition.
Always looking for new opportunities in existing and new market segments to drive value. Your competitors never rest, so neither should you…
III. MARKETING THEORY: UNDERSTANDING CUSTOMER VALUE
Today, brands must work harder than ever to create and communicate values in everything they do. Therefore, if the brand does not meet the high expectations of the customers, then the customers will be less loyal to the brand in a market with so many buyers like today. To convey value to customers, we must understand what value really is and more importantly, what is not value.
What is customer value
?Customer Value is the satisfaction a customer experiences (or expects to experience), by performing a certain action. as well as consider the cost of that action.
This particular action in the traditional sense could be a purchase, but it could also be a registration for a website, a vote or a visit, while cost is anything that a customer has to give up. out to get the benefits they want, such as money, data, time, knowledge.
Think about these marketing concepts:
Marketing is a tool to create, transmit and bring value to customers.
Internal activities within an enterprise, from sourcing, operations, processes, sales, marketing to customer service, contribute to value creation. Business support activities such as human resources and accounting also have a similar role. All of these activities directly or indirectly affect your customers in some way, thereby forming the customer’s perception of your business.
And that leads to a fundamental conclusion: The results of a company’s efforts to create value are measured by the customer’s perception of that value.
People don’t buy just because the producer likes it. They buy products/services because they like them, or need them. More importantly, in a world of endless choices:
Customers will compare their perceived value of similar products when making a decision.
Whether it’s deciding which restaurant to visit, buying a new car, or wondering which digital marketing agency to choose, there are many choices and many factors to go into making that decision. Value Customers are all subjective perceptions, which can only be influenced, but not controlled. This is an accountant’s nightmare. But that’s also why Marketers love this job.
Measure customer value
There are many equations and models used to measure customer value. The simplest formula is:
Perceived value = Perceived benefit / Cost
In other words, for a given set of benefits, as costs increase, perceived value decreases.
This is an important point. Value here does not refer to the price, it refers to the perceived benefits that customers gain when spend money. Literally, cost is only one part of this equation.
Two identical products, with the same appearance, can only compete on cost. Two distinct products do not necessarily compete on cost. Products are not only distinguished by their features but can also be distinguished by their brand. If Toyota comes out with a new model, you can implicitly assume it’s a reliable vehicle because one of Toyota’s “brand keys” is reliability. If another automaker launches a car with a similar design, it may not be able to compete with Toyota because they do not receive the same customer feedback as Toyota.
The same applies in content marketing. Take an example like:
Perceived value of a book = Knowledge acquired / Reading time
The perceived value of your latest blog post can be measured by the perceived benefit of your readers reading the content you provide (e.g. new knowledge) in relation to the time spent on it. gain that benefit.
Factors that affect value
Notice the list below:
Product Function DifferentiationQualityServiceMarketingBrand Selling PriceExisting relationship or experiencePersonal bias from experiences and guidance
Above are the factors that affect customers’ perception of value. Some factors you can control, others you can’t. Each customer ranks the importance of the factors at different levels. Some people love certain brands. Others just buy cheap products. Some prefer products with short content. Others value personal relationships above all else.
Customer value segmentation is one of the main reasons for market segmentation. By identifying a group of people who share your values, you can start creating products and messages that resonate.
So what can you do
?The cycle of delivering value to the customer
Think about everything you do that can deliver value to your audience and customers, remember, customers have many choices and you are not their only choice. Get it clear enough about your market so that you can group it into segments with similar characteristics that respond in a similar way to a given value proposition. Always look for opportunities to create new value. If you rest on your laurels, you won’t succeed. Deliver customer value in the right place at the right time. Listen to your customers. Learn from their feelings about the product you offer. Don’t hesitate to make changes based on what you learn. The customer, in this case, is always right.
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Finally, consider this article by saga.vn. We hope that this article will give you some thoughts and have a positive impact on the customer satisfaction process for your business.