I know the phrase “customer value” is tossed around training sessions and customer service seminars, but I often wonder how objective organizations really are in their evaluations. How is customer value therefore determined? In most instances, it is described as the amount of benefit a customer will get from a service or a product, and what it’s going to cost.
If we then base customer value on perceived benefits with perceived costs, then does the real customer value lie in customer perception? The problem is what one person values as important may not be important to someone else, and the perceived benefits of a particular purchase by Buyer A may not be relevant to the perceived benefit of Buyer B. The benefits of a product or service changes with individual personalities, experiences, environment, age, and economics.
Let’s use shopping for a television as an example of rating customer value. Obviously over simplifying the choices, but I am using the following examples to demonstrate customer perception of value. Here are the choices:
- Sharp 32: $339.00
- Samsung 40: $549.00
- Toshiba 40: $599.00
- Samsung 55 (3D): $3599.00
Let’s also use three different people shopping for a television, so to determine customer value we have to take into consideration gender, age, emotional aspects and economics. My 70+ year-old mother chose the Sharp 32? because of the price. She doesn’t care about LCD, plasma, or resolution, and my mother doesn’t have a clue about SDTV and HDTV. My mom cares about price and the convenience of someone delivering it to her home, installing it, and patiently teaching her how to use it.
Then there is a customer like me who wants HDTV and has some knowledge about televisions. When I compared the clarity and resolution of the Samsung versus the Toshiba I made my choice. The 40? televisions were competitively priced, and the choice was purely subjective. Televisions are easy to carry out and take home in an SUV and technical help is available via my cable provider and a 24 hour/7 day hotline.Therefore my perception of customer value differed from my mother’s perception.
And then there’s my son who wants the most innovative and technologically forward 1080p 3D LED Smart Samsung 55 priced at $3599.00. His perception of quality is based on research and carefully following the latest trends based on the Internet, the media, and of course – his friends. The product is pricey, but in his perception the latest technology outshines the cost factor.
So what should a business do to make sure they are delivering the best product at the best price since it is obvious that one size does not fit all? Businesses need to carefully evaluate demographics and find out what customers rate as most important. If the amount of a benefit a customer will get from a product or service is relative to its cost, then the”realization” (what one gets) is worth the “sacrifice” (what one pays). It’s just up to us as business and service providers to be able to evaluate our customers needs often and critically – so as not to ever throw everyone into “a common pot of shoppers.”
photo credit: seantoyer
