Customer Value

Most people enjoy social media because they can connect with other people, see what their friends and family are doing, and keep up to date with events worldwide. They consume social media because it provides value to them. So what is customer value? What creates customer value, and how can companies make use of it?

You'll find out the answers to these questions and much more if you get to the bottom of this explanation!

Customer Value Definition

Customer value is based on customer perceptions. It evaluates a product's worth compared to competitors' products. Thus, the customer value definition is as follows:

The value attached to products and services may refer to several different things, including the benefits these goods or services deliver to the company's target market and the value for money they provide consumers.

Companies constantly try to understand and improve the value they add for their clients, allowing them to bring in new customers and keep the ones they already have satisfied.

In particular, finding out why clients are drawn to a brand enables much more efficient targeting and appealing to specific demographics.

It may also help develop trust between businesses and their consumers, leading to repeat purchases.

In addition, by understanding the factors that influence value, companies can begin actively shaping perceptions and ensuring that they constantly fulfill the expectations of their customers.

Customer Value Proposition

The customer value proposition clearly states what makes a company different from others - what they bring to the table for customers.

The following are elements of a customer value proposition:

• Quantified value: A customer value proposition should contain a list of the advantages a product provides consumers. This includes the numerous ways a product adds value for consumers beyond the practical value of the product - the emotional, economic, and symbolic value.

• Differentiation: The customer value proposition should explain to clients how a product differs from others in a particular category to demonstrate why it is the superior option.

• Relevance: A customer value proposition should clearly explain how a product help solves problems and responds to potential customers' needs.

Customers create expectations about the value and satisfaction of different market offers and acquire products and services based on these expectations.

Customers pleased with their experiences are more likely to make repeat purchases and share positive feedback. Customers unhappy with a product are more likely to speak poorly about it to others and switch to a competitor.

Value propositions like these are what set one brand apart from another. They answer the buyer's query: "Why should I purchase your brand rather than one of your competitors?".

Customer Value Journey

The customer value journey is a plan companies may follow to generate a consistent stream of consumers. It outlines the step-by-step method of turning strangers into long-term customers who advocate for the company.

It is based on the dynamics of human connections and consists of various phases absent from a conventional marketing funnel. Not only does this result in a more natural sequence of encounters, but it also helps align the interests of the organization and the consumer around a shared success.

This results in satisfied customers who are more likely to be company advocates. The customer value journey is one of the most critical phases in developing an effective marketing strategy.

Some essential steps in the process of building a compelling customer value journey include:

1. Awareness refers to the channels a brand uses to make potential customers aware of the brand and its products.

2. Engage: Engaging is the phase in which the brand tries to receive the prospect's attention and trust.

3. Convert: Converting potential customers to actual customers through offering them various unique experiences.

Customer Value Management

Customer value management refers to managing all aspects of a customer's value journey, from the initial contact with customers to post-sales activities.

Customer value management can build a customer value-driven marketing strategy if they comprehensively understand customers and the market.

First, the firm must determine who its customers will be. It accomplishes this goal via the process of market segmentation.

Finding as many clients as possible and generating demand is part of marketing management. However, customer value managers know that they cannot satisfy all of their clients' needs. In fact, they may not provide satisfactory service to their existing customers if they use their efforts to accommodate everyone. Therefore, the business needs to prioritize acquiring clients it can successfully and economically attend to.

At the end of the day, customer value managers must identify which consumers they want to target, when, and at what volumes.

Additionally, the firm must determine how it will serve its targeted clients and how it will separate itself from its competitors and position itself in the market.

A brand's value proposition refers to the collection of advantages or qualities that the brand declares it will provide to customers to fulfill customer wants and needs.

Types of Customer Value

There are five main customer value types: functional, social, emotional, epistemic, and conditional value.

1. Functional value: This is the value a customer gets from the functional use of the product - how good is the product at delivering its primary function (what it is made for)?

2. Social Value: Refers to the value the product generates from being associated with a specific type of social group (e.g., associated with wealthy individuals).

3. Emotional Value: Refers to the value a product generates from evoking certain emotions or affective responses. E.g., security alarms give a sense of security.

4. Epistemic Value: Refers to the value a product generates from being able to induce curiosity and deliver fun experiences to consumers.

5. Conditional Value: As the name suggests, it depends on a specific context or sociocultural setting.