Customer value involves two major aspects in the desired value and perceived value (Kotler, 2017). The desired value is something that the customer wants with the product or service like return policy, a 2-year guarantee and the service level of the company. Whereas, perceived value has to do with the customer belief of the value he/she obtained from the purchase. So, the customer value is something that an individual customer places on a service or a product for that offering. If we’re to convert the same into an equation: Customer Value = benefits - cost
Customers are most likely to purchase an item with the highest customer value among all the offering in the market. The highest quality product or service doesn’t ensure that it’ll provide the highest customer value as the benefit of each product is measured against the cost. Some customers are willing to pay a premium price for a high level of service or high-quality product while others can make the decisions that the same benefits aren’t worth the cost (Oresky, 2014). An example of this can be if we’re presented with an opportunity to choose between a five-star hotel with a fancy lobby, room, and a wonderful view at a premium price and a normal hotel at a very low cost with good enough bed to sleep at. The choice will differ from person to person and so does the customer value for each individual.
Value is something that is co-created together by a customer and the company. And, it is important to create a value for both the customer and the firm. Relationship marketing is one of the component of holistic marketing which contributes towards creating value. It does so by:
Creating a long-lasting sustainable relationship with the customers, vendors and the financial community
Loyalty: Apple, a tech giant is a good example of the same. They come up with new improved devices under the same category with some improvement every single year and people often go for them. The company not so long ago announced with replacing the batteries at half the cost and provide added benefits to the customers amid a growing concern from the users of their mobile device. The device was old enough and the issue showing up was obvious, but the company did something that showed their soft side and also that they truly care about their customers.
Positive Promotion: If a customer is satisfied with the product, he/she associates oneself with the product. And, while recommending to the friends and family, the person is more likely to suggest the use of the product. It gives a positive marketing of the product and helps increase sell.
References
Kotler, P. (2017). Customer Value Management. Journal Of Creating Value, 3(2).
Oresky, M. (2014). Customer Value Creating and Customer Profitability Modeling. SSRN Electronic Journal.
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Customer value involves two major aspects in the desired value and perceived value (Kotler, 2017). The desired value is something that the customer wants with the product or service like return policy, a 2-year guarantee and the service level of the company. Whereas, perceived value has to do with the customer belief of the value he/she obtained from the purchase. So, the customer value is something that an individual customer places on a service or a product for that offering. If we’re to convert the same into an equation: Customer Value = benefits - cost
Customers are most likely to purchase an item with the highest customer value among all the offering in the market. The highest quality product or service doesn’t ensure that it’ll provide the highest customer value as the benefit of each product is measured against the cost. Some customers are willing to pay a premium price for a high level of service or high-quality product while others can make the decisions that the same benefits aren’t worth the cost (Oresky, 2014). An example of this can be if we’re presented with an opportunity to choose between a five-star hotel with a fancy lobby, room, and a wonderful view at a premium price and a normal hotel at a very low cost with good enough bed to sleep at. The choice will differ from person to person and so does the customer value for each individual.
Value is something that is co-created together by a customer and the company. And, it is important to create a value for both the customer and the firm. Relationship marketing is one of the component of holistic marketing which contributes towards creating value. It does so by:
References
Kotler, P. (2017). Customer Value Management. Journal Of Creating Value, 3(2).
Oresky, M. (2014). Customer Value Creating and Customer Profitability Modeling. SSRN Electronic Journal.