{"id":48966,"date":"2022-07-26T19:39:53","date_gmt":"2022-07-26T19:39:53","guid":{"rendered":"https:\/\/inmoment.com\/xi-terms\/what-is-customer-value\/"},"modified":"2023-11-14T11:41:04","modified_gmt":"2023-11-14T18:41:04","slug":"what-is-customer-value","status":"publish","type":"glossary-terms","link":"https:\/\/inmoment.com\/en-au\/xi-terms\/what-is-customer-value\/","title":{"rendered":"Customer Value"},"content":{"rendered":"\n

Diamonds are a girl\u2019s best friend, but not all diamonds end up costing you the same amount\u2014even for the same size of diamond. Take this 1-carat diamond ring from James Allen<\/a> jewelry. Here, you could get a nice diamond ring for about $5,000. <\/p>\n\n\n\n

But if you went to Tiffany\u2019s<\/a> (a very high class and famous jeweler), you couldn\u2019t find a 1-carat diamond ring that costs less than $15,000. Both of these diamonds are 1-carat, so why are the prices so drastically different? <\/p>\n\n\n\n

The answer lies in the concept of customer value. Every company has to work with customer value to make sure their customers are satisfied with the product and prices and find the products to be worth the price. So what is customer value? We\u2019ll walk you through this concept and how your company can utilise it to help your customers. <\/p>\n\n\n\n

Why Does Customer Value Matter?<\/h2>\n\n\n\n

Customer value is something that every company should be working with and trying to understand and improve. Why? Understanding your customer value and why your customers come to your products and services can help you both retain your current customers and attract new ones. <\/p>\n\n\n\n

To retain your customers, it\u2019s important to understand what they value about your product or service right now. For example, if your customers value your low prices, you\u2019ll know to keep your prices low to keep them coming back again and again. If you added expensive products, your customers might go somewhere else instead. You\u2019ll be better able to keep these customers coming back if you know how they perceive your company and why they value your products and services. <\/p>\n\n\n\n

You\u2019ll also be able to attract new customers. If you already know why customers choose your company, you\u2019ll be better able to tailor your products and services to attract new audiences who would have similar ideas of customer value. For example, if your company offers extremely low prices\u2014especially compared to nearby competitors\u2014potential customers who value low prices and savings would be drawn to your company. <\/p>\n\n\n\n

Overall, understanding and attracting customers is why every company should be focusing on customer value and what their customers need. But to better ensure you\u2019re meeting your existing customers\u2019 needs and drawing the new ones in, you\u2019ll need to know how to measure customer value. <\/p>\n\n\n\n

How Is Customer Value Measured?<\/h2>\n\n\n\n

Many aspects of your company affect your customer value. Your reliability, your brand recognition, what industry you operate in, your public image, your customers\u2019 experience, and more. But at its core, customer value is really only looking at two concepts, which means there is actually a formula for measuring customer value: total customer cost subtracted from perceived customer benefits. We\u2019ll walk you through what these two numbers mean. <\/p>\n\n\n\n

What Are Customer Benefits?<\/h3>\n\n\n\n

Customer benefits are anything a customer perceives they will receive or gain from using your product or service. These benefits can include more than just the actual product or service though, as some benefits come through things like association with a well-known brand or a company that has good values. Here are some of the facets of customer benefits: <\/p>\n\n\n\n