Deep Dive into Customer Value!

When I first heard about ‘Customer Value’, I thought this is related to “money”- giving a quality product to the customer at a good price. But that is not true!

Customers see value in a product/service that makes their work easier. They want the product/service to solve their problem. A positive, smooth, memorable experience counts much more than the monetary cost, when we talk about customer value. There are many options available, and the customer will choose the brand that believes in consistent value delivery.

Even one poor experience can result in losing our customer to the competitors. Customers would come back only if they had a really good experience throughout their journey with the product. Cost is not the only deciding factor, but customers want additional value while engaging with the brand. Why would customers choose us over many other brands? It’s only because they see value like, ease of purchase, smooth delivery experience, feedback call for checking the experience and so on.

Q. What Is Customer Value?

I went to a restaurant and ordered my favorite snack. This restaurant was giving it at a lower price than the one which I usually visit. When I received the order, the quantity was almost half as compared to the other restaurant. I found that the taste was also not very good. I will not visit this restaurant again and will prefer to go to the other one, even if it has a higher price.

This means customer value is not only about money. It is a measure of cost and all the benefits which the customer received for that cost. Customer value is best defined as how much a product or service is worth to a customer.

Customer value means:

·????? The worth of product/service for the customer

·????? A comparison of cost paid and benefits received by the customer

·????? Level of satisfaction offered by the product or service

·????? Buying experience

·????? Delivery experience

·????? Expectation from the product

·????? Engagement experience with the product

·????? Support experience

·????? Moment when Customer realizes that your product is making their life easier

?Customers are ready to pay money for the value they are receiving. For example, even when there is an option to fill in the visa applications online, many of us prefer to use agents to fill them. These agents collect all the required documents, make the file ready, get the visa appointment scheduled and then we are just required to be there at the time of appointment. Customers are paying these agents for the convenience and hassle free submission of their application. They don’t want to spend time on the portal to get the appointment scheduled as it can be time taking. They see value in the time and effort saved by using the services of an agent. So they are ready to pay money for the value.

Today’s customer is aware, and they always keep measuring whether they received benefits and services over what they paid. Benefits can vary for different customers and so can the value. Customers don’t spend only money when buying the product, they also spend time, effort, energy, convenience, intelligence, knowledge, research and so on.

Q. Is customer value same for all the customers?

My friend used to sell mobile phones from a local shop in our area. I suggested him to start selling on Amazon. He started selling online and his sales increased by 70%. But for an existing seller on Amazon, there may not be a huge increase in sales as they are always selling online. This means ‘Customer value can be different for different customers’ The customer value refers to the importance of our product/service for the customer. It is the satisfaction of the customer with our product in relation to the cost they have paid for the product. If the customer feels that they have received enough value for the money they have spent on our product, they will keep coming back to our product.

Q. What are the benefits the customer looks for?

We saw that the benefits vary for different customers. Benefits can include:

·?????? Quality

·?????? UI/UX

·?????? Engagement

·?????? Brand position

·?????? Experience

·?????? Ease of use

·?????? Accessibility

·?????? Solution to the problem

·?????? After sales support

·?????? Change acceptance

?Q. Is value delivered only by the product/service?

The value is delivered through:

·?????? Product

·?????? Brand

·?????? Customer Service

·?????? Processes and procedures

·?????? Culture of the organization

·?????? Interactions with employees

·?????? Interactions with other customers

?Q. Does value remain the same during the customer journey?

Value can change over the course of customer journey. The value keeps on changing with every interaction with the product, the brand and the team members.

Q. Can we control Customer value?

The major point is that we can influence customer value but we cannot control it. Customer value is based on individual perceptions. The best way to influence customer value is by communication customer value. This can be done through :

·?????? Price

·?????? Quality service

·?????? Strong relationship

·?????? Keeping customer happy

·?????? Enhancing customer experience

·?????? Easy and convenient interactions

·?????? Listen to the customers

·?????? Make improvements based on customer feedback

·?????? Making realistic commitments

·?????? Focus on customer satisfaction

·?????? Improve your marketing communications

Q. Why Is Customer Value Important?

You must be wondering that why are we talking so much about delivering value to the customer. Let us look at the benefits of delivering value :

·?Every organization wants to get repeat business from the existing customers. Delivering customer value helps to retain customers.

·?Customers become the brand advocates and start recommending our brand to their friends and family. This way they are helping the marketing team.

·?Repeat business and more business from existing customer results in getting more revenue which means more resources

· Make changes in the product according to the feedback shared by your customers. This results in better product stand in the market

· We are easily able to meet the goals of the organization as new customers keep coming and existing customers keep paying for the product.

· The strategic priorities of our customer becomes the guide to our internal strategy and planning

·?The focus of all the internal teams becomes common, leaving no space for arguments around product development or delivery

· Customer value helps us to meet user expectations and also helps to build patterns to understand how these expectations change over time

·?Customer lifetime value is a majorly followed metrics for measuring the satisfaction level of customer. This metrics is influenced by the customer value we deliver.

· Higher customer value helps the organization to gain competitive advantage and get recognized for the brand value.

Q. What are value drivers?

Value drivers are the selling points of our product/service. These are the features which make us stand above in the market and make the product valuable to the customers. The value drivers help us understand what people are ready to pay for our product/service, what is unique about our brand. These are the identifiers that make our product unique and more liked than the product offered by our competitors, the product differentiators that provide value for our customers and solve their problems. We need to talk about the unique features of our products and compare them with other available products in the market, in order to appeal more to prospective customers.

Value drivers help us get answers to questions like - Why do customers buy from our brand? Why do they choose us over our competitors? This value drivers list helps to create the right strategies.?

Few examples of value drivers:

1. Brand value
2. Price of product
3. Market feedback
4. Solving for the customer
5. Onboarding
6. Customer service
7. Fulfilling the promises
8. Ease of use
9. 24x7 Help
10. Approachable team
11. Take action on feedback

?Q. What are the components Of Customer Value?

·?????? Monetary value – Price against worth of product/service

·?????? Psychological Value – How the product makes the life of customer easier

·?????? Functional Value – How the product is solving the pain area of the customer

·?????? Social Value – How the product is benefitting the customer socially

Q. What should we know to add value for our customer?

We need to have answers to questions like –

·?????? What is customer expectation from our industry and other brands?

·?????? What are our competitors offering as value?

·?????? What is the problem solved by our product/service?

·?????? What impacts the purchase decision of our customer?

·?????? What matters the most to the customer – price or quality?

·?????? What product is our customer currently using?

·?????? Is the customer happy with their current product?

·?????? What compels them to buy from us?

·?????? Are the customer expectations realistic?

?Q. How to Create Value for Customers That Lasts?

When we decide to work towards creating value for the customer, we need to know the clear expectations of the customer. The best way to identify the areas of improvement is to collect customer feedback. Taking customer feedback communicates our commitment and care about them. Acting on the collected feedback is very important. We need to use the feedback to make the strategy plan and deliver what the customer wants.

Few improvement areas may be:

·?????? Easy to buy and use

·?????? Effective Onboarding strategy

·?????? Personalized interactions

·?????? 24x7 support

·?????? Dedicated CSM

·?????? Sharing of data driven insights

·?????? Clear communication

·?????? Share rewards and surprises

·?????? Build strong relationships

·?????? Understand the patterns of changes and issues

·?????? Keep them informed about the roadmap

·?????? Deliver as committed

·?????? Proactive communication and support

·?????? Close the feedback loops

·?????? Celebrate the milestones in customer journey

Q. Is delivering customer Value the job of only Customer Success team?

Absolutely No! Our product, marketing, sales, support and customer success teams need to build strategies and priorities around delivering customer value. This can be achieved by internal collaboration and common mindset of making the customers successful.

1. Product Team : The product team works on understanding the problems faced by the customer and building the solution to target these problems. The product development approach shifts to the customer demands and priorities.
2. Marketing Team : All the marketing campaigns are based on customer goals and priorities. Case stories are built showcasing how the product can help the customer get rid of their challenges.
3. Sales Team : Sales pitch is made with the mindset of understanding the customer requirement. The solution is offered keeping in mind the challenge faced by the customer.
4. Support Team : Every customer interaction with the team needs to add value. The support expertise helps to keep the answers focused and personalized. This is a great way to add customer value during the customer lifecycle.
5. Customer Success Team : Onboarding efforts focus more on specific goals and job roles. The efforts move around communicating how the product supports the expected outcomes.

?Q. How to measure Customer Value?

It is important to measure customer value so that we can refine and optimize our efforts to deliver customer value. Few ways to measure Customer value can be:

1. Communicate directly with the customers and ask them how our product is providing value and how can we continue to do so. This can be done through collecting feedback using surveys or by direct calls.
2. NPS can be another way to measure Customer value. Ask the customer to rate the product experience in a numeric value between 1-10
3. Observe if the customer gets convenience, quality and other benefits worthy for the cost, time and energy paid by them.

Customer value formula

The below formula can be used to measure customer value:

Total Customer Benefits — Total Customer Costs = Customer Value

CONCLUSION

Improving Customer Value is the key to success for our product/service. We need to exceed the customer expectations in order to be their best choice out of all the available options in the market. We need to take time out to research and understand the customer needs and challenges. Breaking down the customers into segments is a great way to deliver value to the target customer segment.