What is customer value and how do you create it?

Customer comfort and satisfaction should be the overriding goal of any brand, no matter what its business area. Why? These two issues are crucial not only for gaining the consumer's attention, which is the first step leading to the finalization of a transaction, but also for customer retention. A loyal customer means steady profits for the company. It is also worth noting here that acquiring new buyers is more costly than retaining regular customers. For a successful sales process, customer value is a very important concept. How to define this term? What influences the creation of customer value? We give you a hint!

What is the definition of customer value?

Customer value is defined as an individual's perception of the advantage of the benefits over the burdens that result from choosing a particular offering. In practice, creating customer value can make the difference between a consumer ultimately deciding to buy your product or ordering the service you offer.

Sound convoluted? Then let's try to explain what customer value is using a concrete example. Let's assume that Mr. Smith is going on an unplanned trip to the mountains in two days, and as a result, he needs to replenish his closet very quickly. After a brief inspection, it turns out that he does not have trekking boots. The man quickly checks the offer of online stores and pre-selects a few pairs that fit his budget, suit him aesthetically and have good reviews. What might push him to choose a particular offer? Fast delivery. We mentioned earlier that Mr. Smith is shopping under time pressure and has only two days to find the right footwear. In such a situation, he is likely to choose to buy from the store that offers the fastest delivery, even though he may have other favorites among the selected models of trekking shoes.

The conclusion is simple: increasing your customer value will help you compete for their attention. You must remember, however, that this is largely an individual issue, depending on what the expectations and needs of a particular buyer are. In practice, this means that the value proposition for customer A may be quite different from that of customer B.

What are some examples of the most important added value for the customer?

• The appearance of the product tailored to the buyer's individual expectations. In the case of two of the same T-shirt models, the customer can decide on the color that he or she thinks is the most in-your-face or aesthetically preferable.
• Understandable terms of purchase. A customer usually does not want to wade through a wall of unnecessary information.
• A sense of security. A customer is likely to be more inclined to store at an established store. This is especially true for online stores where you can't physically take the goods in hand.

Of course, as we mentioned earlier, customer perceived value is a matter largely dependent on the needs of a particular person. These, in turn, often change over time. In practice, this means that an effective customer value creation process should be individualized and tailored to your target audience.

Customer value versus customer value

We have explained what customer value and satisfaction is, but you must remember that this concept is in no way related to the similar-sounding term customer value. The latter term refers to the revenue your company is able to generate overall on all transactions completed by an individual. Customer lifetime value is otherwise known as CLV, or customer lifetime value.

See also: how does experience marketing work?

For the sake of better explanation, let's again use a concrete example: let's assume that a customer has been buying from your e-store for the last 3 months, and after that he has not placed any more orders. During the said 3 months, he shopped 5 times and spent a total of 1,000 zlotys on your products. In that case, his CLV is just that amount.

Why determine CLV? Based on this indicator, you will easily identify the group of customers that brings your company the highest profits, which in turn will allow you to optimize your marketing efforts. To summarize: customer value is the values seen from the perspective of the consumer, customer value is the value of the buyer considered from the perspective of the brand.

Ways to create value for the customer

Customer value is important in marketing. Why? By clearly communicating it, you increase the chance that the consumer will decide to take advantage of just your offer. This, in turn, translates into the revenue you ultimately earn. There are many ways to create value for the customer. You need to tailor them to what kind of business you have, what you have to offer buyers and what their individual needs and expectations are.A customer satisfaction survey will help you identify them, for example, , providing information on customer requirements and opinions about your brand. It will also be helpful to prepare a map that illustrates what the customer's purchase path looks like, depicting their points of contact with your offer.

What customer value enhancing activities are worth taking for satisfactory profits?

• A very good way to increase sales in a stationary store and online store. Let's assume that a customer has a choice between a cheaper but chaotically decorated store and a more expensive one, but one that guarantees a positive aesthetic experience, is well organized and gives the impression of being resourceful. Which will he choose? It is very possible that in the end he will decide to use the offer of the second store, which, for a higher price, nevertheless offers greater shopping pleasure. Merchandising should be planned and executed by specialists.
• Consumer Programs. An excellent tool for building a customer relationship based on loyalty. However, it is worth noting that attractive consumer programs can also be the element that will tip the balance in your favor. If you offer the same prices and quality as your competitors, a favorable customer loyalty program is likely to encourage the buyer to choose your product or service.
• Professional, knowledgeable service. This element can be crucial to the consumer experience (customer experience). Improving the quality of service is one of the primary activities that add value for the customer.
• Several payment and delivery methods available. The value of a product or service to a customer can depend on whether or not he finds the one he prefers among the proposed delivery and payment options. This is very important for generating customer value for online stores.
• Adapt communication tools to the buyer's needs. When preparing a customer value map, you can't miss this element. The way you communicate with your audience must match their expectations. An example? Young people value communication through social media.

Delivering customer value can determine the greater success of your brand, so you can't neglect this area of your business. At the same time, however, you must remember that the basic issue is to define them. Analyzing the customer values that are actually important to the customer will allow you to optimize your offering.