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Unit 2: Customer Value
4. …………………… is the capture, storage, extraction, processing, interpretation and Notes
recording customer data to the user.
5. …………………… is any CRM function that provides a point of interaction between
customer and the channel itself.
2.2 Customer Value
The components of customer value are deceptively simple. Product quality, service quality,
price, and image shape a customer’s perception of value. A firm’s strategy and performance in
these areas are integrated by customers into a perception of the value proposition. This is
particularly important for first time customers. In this highly competitive business environment,
the customer will compare the perceived value of competitive offerings. The ultimate “winner”
in the battle for the customer’s pocket book is the firm that delivers the “best value” from the
customer’s perspective. These components of customer value can be shaped into a simple model
Figure 2.1: Components of Customer Value
Product Service
Quality Quality
Price Customer’s Image
Perception
of Values
Source: http://notablur.com/wp-content/uploads/2012/09/2_customer_value_questions.jpg
Once a customer has made a purchase decision, a fifth component of value emerges.
That component is the relationship between the customer and the vendor. Over time the
relationship component can develop into an extremely important element. Unfortunately, firms
often have explicit strategies to develop the other four components of value but simply expect
the relationship to happen naturally and spontaneously. Such an expectation can be unrealistic.
Each of these components can and should be broken down into much more detail to be
managerially useful. Let’s use a full line department store as an example, since most of us have
experience with such purchases. Product quality refers to the tangible features that a customer
evaluates. For a department store, product quality can be partitioned into two dimensions. One
dimension deals with the characteristics of the store itself. These characteristics would probably
include location, accessibility, convenient parking, store design and layout, lighting, signs,
fixtures, and furnishings. The other product dimension would include characteristics of the
products themselves. These would probably include characteristics such as variety and assortment
of products in each area.
Example: Men’s clothing, women’s clothing, and house wares might each be evaluated
individually.
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