Customer Value Analysis
It's my opinion that customers will use the firm's product/service that is perceived to offer the
highest customer delivered value. Benefits received for price and non price burden is the true
meaning of customer value. Excellent firms will provide strong benefits-to-burdens ratio. Price
is an important part of value but it is not the same. Value involves a much wider concept. It is
the total experience of the customer while price is simply price. This is why firms compete on the
the total customer experience rather than on the basis of price. Customers are given non-price
reasons to care.
Creating value - This entails a series of processes. Its an elaborate focus on your customer's
wants and needs for receiving value presently and in the future. This must be a vision and one
of your critical success factors of the organization. It is also part of your continuous
improvement focus or reengineering of your business processes. Creating value also means identifying
need changes and create a passion for implementing the changes. No strategy will be successful
without proper implementation.
Customer Value Analysis - Managers should conduct a customer value analysis on a regular
basis in order to reveal the company's strengths and weaknesses relative to various competitors.
The major steps in such an analysis are:
- Identify the major attributes customers value
- Assess the quantitative importance of the attributes
- Assess the company's and competitors performances on the different customer values against their rated importance
- Examine how customers in a specific segment rate the company's performance against a specific major competitor on an attribute-by-attribute basis
- Track and monitor customer value periodically
Email DerrickWRobinsn@comcast.net
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