Thinking Beyond Price
Beyond the price tag, customer value can also include the time, emotion and energy it took the consumer to weigh the purchasing decision. There are some formulas that try to get to the base of the issue. That being said, according to HubSpot’s article, “What is Customer Value?,” one must identify the customer benefits. In a general scenario, this could include such factors as the quality of the product or service; the ability to provide a better solution, your brand’s reputation, and your unique customer experience. Next, calculate the total customer costs, which could include tangible costs (the price of the product, installation, maintenance and so on) as well as intangible costs (the time invested in the purchase, a poor customer experience and so on).
Once these variables are considered, one could calculate and track the customer value. But it’s not so easy measuring the intangibles and perceived value of a purchase. It’s more than just a numbers game. Working with tangible and intangible benefits, such as brand reputation, social status, the stress of the purchase, for example, can vary. Each person is different with their own perspectives, preferences and needs. This is where creating buyer personas can be helpful in identifying the target audience.
Overall, HubSpot notes five ways to increase customer value:
- Evaluate your customer experience.
- Focus on more than price.
- Collect customer data.
- Target your most loyal customers.
- Segment your customer base.
Improve the Customer Experience
All Things Insights examined the customer experience in “Creating Synergy by Improving Customer Experience.” Customer experience (CX) is the impression your customers have of your brand based on all of the interactions they’ve had with your business. User experience (UX) is specific to how people use and perceive your products. These key components, customer experience and user experience, work together, create synergies and benefit the marketer in improving the overall experience, which in turn increases customer value.
How can insights increase customer value? By identifying the right consumers and their preferences. In “Reaching the Consumer,” Ericka Podesta McCoy, CMO at Resonate, shares the findings of their 2023 State of the Consumer Report and gives valuable insights on how consumers are responding to the world today—and how their concerns affect their purchasing behavior.
The Insights Role
Insights play a critical role in assessing customer value by providing a deeper understanding of customers’ needs, preferences, behaviors, and perceptions. By analyzing these insights, businesses can determine the value they offer to their customers and make informed decisions to enhance that value. We asked ChatGPT how insights can help assess customer value:
- Understanding Customer Needs: Insights derived from data analysis and customer feedback can reveal what customers truly need and desire. Businesses can identify pain points, challenges, and unmet needs that their products or services can address. By aligning offerings with these needs, businesses can enhance customer value.
- Segmentation and Personalization: Insights enable businesses to segment their customer base based on various criteria such as demographics, behaviors, preferences, and purchasing patterns. This segmentation allows for personalized offerings and targeted marketing campaigns, increasing the perceived value for each customer segment.
- Value Proposition Refinement: Insights help refine a business’s value proposition by highlighting the unique benefits and features that resonate most with customers. This leads to more effective communication of value and differentiation from competitors.
- Feedback Analysis: Analyzing customer feedback, reviews, and comments provides insights into what customers appreciate and what areas need improvement. Businesses can use this information to refine their products, services, and customer experience.
- Identifying Trends and Anticipating Needs: Insights can reveal emerging trends, market shifts, and evolving customer preferences. By staying ahead of these changes, businesses can proactively adjust their offerings to align with customer needs and maintain a high level of value.
- Customer Journey Mapping: Insights into the customer journey help identify touchpoints where value can be maximized. This includes streamlining processes, reducing friction, and enhancing overall customer experience.
- Measuring Customer Satisfaction and Loyalty: Insights from customer satisfaction surveys, Net Promoter Scores (NPS), and other metrics help assess how well a business is meeting customer expectations.
- Benchmarking Against Competitors: Insights about competitors’ offerings, strengths, and weaknesses provide a basis for comparison. This allows businesses to identify areas where they excel and where they might need to enhance their value proposition to remain competitive.
- Long-Term Relationship Building: Insights enable businesses to anticipate long-term customer needs and build lasting relationships. By continually providing value over time, businesses can retain customers and foster brand loyalty.
- Pricing Strategy Optimization: Insights into customer perceptions of pricing relative to the perceived value help businesses optimize their pricing strategy. This ensures that customers perceive a fair exchange between what they pay and the value they receive.
Growing Customer Loyalty
Insights can empower businesses to gain a holistic view of their customers, enabling them to refine their offerings, tailor experiences, and continuously improve their value proposition. This process is crucial for maintaining customer satisfaction, loyalty, and ultimately, sustained business success. As Qualtrics notes in its blog on customer value, “Figuring out why customers are coming to your brand helps you to better tailor your products and services to new audiences… Not only that, but once you understand what’s affecting your customer value, you can start to actively shape perception and ensure you consistently meet customer expectations.”
Video courtesy of NNgroup
