Shailendra Dasari

Value Framework
Selecting the value to be offered Intensity of value to be offered Avoid under/over selection of value Creating the value
Delivering the value Capturing back the value Communicating the value Enhancing the value

Components of Customer Value

Tangible components Functional value : Ability of the product to meet a given need. Economic value : Price advantage Convenience value Aesthetic value Service value

Components of Customer Value

Intangible Components Social value :Social acceptance/desirability Prestige value Sentiment value : E.g. Turntable , Radio set. (Main theme of retro-marketing) Belief value :Reconfirming customers values/beliefs(E.g. Jain food served in Jet Airways flights)

Components of Customer Cost

Price
Cost of acquisition(Time , efforts) Running/maintenance cost Psychological

Customer Perceived Value

Difference between customer value and customer cost
Positive CPV will enhance customer satisfaction

It is the customer who decides what value is.

Marketers should try and enhance the CPV

Delivering Value
Value Proposition: Whole cluster of benefits that the company promises to deliver Value-delivery system : Addressing all the experiences a customer has during the acquisition and usage of an offering

Total Customer Satisfaction

Satisfaction is a function of expected value and

delivered value A totally satisfied customer turns a hard core loyalist. Satisfaction can be measured through
Satisfaction Surveys Feedback from lost customers Number of warranties revoked Mystery shopping

Product Quality
Quality is the ability of a product/service to satisfy

stated or implied needs. TQM is an enterprise-wide initiative to continuously improve the quality of processes , products and services Flip side of TQM : Too much focus on processes may result in losing focus on customer Return on Quality: Measured in tangible terms like increased value for customers, lower costs or increased sales

Customer Lifetime Value

NPV of stream of future profits expected from

customers lifetime purchases CLV=CLR-CLC(after applying the discounting factor) Customer Equity=Sum total of CLV of all the customers Cost of acquiring a new customer=5 times that of satisfying an existing customer . A 5% reduction in customer defection can boost the profits by minimum 25%. Therefore it is important to retain customers.

Strategies for Retaining Customers

Financial bonds
Social bonds Customized bonds Structural bonds