Measuring Customer Value
The equation to calculate customer value is as follows:
Customer Value = Total Benefits - Total Costs
Customer value has two parts: the desired value and the perceived value. The former is that the customer wants to receive from the product while the latter is the benefit that the customer receives from a product.
The perceived value is more important than the desired value because your business's success depends on the customer's perception of that value. The benefits received should trump the costs involved because that is when customers start to see the value in your offering.
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Satisfied customers perceive value in your offerings and that means they’d be willing to pay more and that can be done by providing value to them. This article will help you to understand and apply the methods that will bring success.
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