What are some possible benefits and costs when determining customer value?
A fundamental concept in successful marketing activities is the offering of value to the firm’s target market/s.
Benefits are delivered through design aspects and product attributes that provide some advantage or positive outcome for the end-consumer. The more benefits perceived by the consumer, the more likely they are to see value in that particular product.
Without consumers perceiving that the product or service will provide them with positive value, they will not trial (an initial purchase) nor will they repeat purchase the product.
In simple terms,
no perceived customer value = no/little new and repeat customers
which equals business failure through the lack of profitability.
Further down in this article you will find a list of benefits and costs to further help understand the fundamental marketing concept of customer value.
In many cases, it is easy to describe the product’s features, but is often harder to describe and outline its benefits. Therefore, here is a generic list of example benefits that might be helpful in understanding how to frame benefits for consumers.
|Easy-to-use||Choice of options|
|Fun for you||Trendy|
|Healthy||Simple to understand|
|Efficient||Suitable for all ages|
|Safe||Fun for the whole family|
|Relaxing||Saves you money|
|Personal service||Easy to fix/repair|
|Works well||Fast turnaround|
|Price (up front)||Unfriendly staff|
|Price (ongoing charges)||Delivery costs|
|Detailed information required||Need to assemble|
|Long, awkward process||Have to wait in a long queue|
|Frequent repairs likely||Low quality (won’t last long)|
Simple Approach to Increasing Customer Value
For some reason, many firms tend to focus mainly upon increasing benefits to consumers in order to gain market share through greater overall value. That is a great approach and should be encouraged (provided it is cost-effective) as it will help build customer loyalty and differentiate offerings.
But… working to reduce costs (beyond just price) also improves the value equation for consumers. Therefore, marketers should consider things like:
- Simplify the purchase process
- Make the purchase more convenient
- Provide more/easier information
- Assembly services
- Waiting systems (queue management)
- Improved customer relationships
- Improved customer service
- Warranties/repair options