Customer Value: Enhancing Strategies and Analysis Report

This report delves into the multifaceted concept of customer value, defining it as the incremental benefit a customer derives from a purchase, expressed as the difference between benefits and cost. It identifies quality, price, and service as key influencing factors, differentiating between desired and perceived value. The report then explores the literature, examining how product quality, cost considerations, and customer service impact customer value. It emphasizes the role of product quality in meeting customer expectations and ensuring satisfaction, while also analyzing the importance of cost in shaping perceived value. Furthermore, it highlights the significance of customer service in providing support and enhancing the overall customer experience. Finally, the report touches upon the importance of logistics lead time in the broader context of customer value creation.

Running Head: CUSTOMER VALUE
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Enhancing Customer Value

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Introduction
Customer Value is defined as the incremental benefit which is derived by a customer through
purchasing a product. The value can be expressed as the difference between the total of tangible
and intangible benefits and the cost of the product. There are three factors, price, quality and
service, which influence the value of a product. As the quality and service of a product increases,
its value also increases. On the contrary, when the price of the product increases without any
change in the benefits, the value of a product decreases. The customer value is categorized into
two types-- the desired value and the perceived value. The desired value indicates the value
expected by a customer. On the contrary, the perceived value indicates the value of a product
expected by the customer after considering the cost. The perceived value is highly dependent on
the tangible benefits received by the customer on payment of the cost. The actual value or the
tangible benefits of a product can be realized after consumption of the product. When the product
provides actual value which is higher than the perceived value, the customer value becomes very
high. On the contrary, when the actual value is lower than the perceived value, the customer
value decreases.
Literature Review
Quality—

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The customer value model indicates that the value of a product depends upon performance.
When purchasing an item, a customer expects some attribute for it. When the attributes are found
in the product, the customer derives value based satisfaction. Enhancing quality of the products
enhances the chance of having the desired attributes as well. From this perspective, quality of the
product plays a key role in enhancing the customer value. Quality of the products also ensures
that the product would perform in a desired manner in several consequences. It increases the
chance of attaining consequence-based satisfaction among the customers. Higher customer
satisfaction indicates that higher value is being received from the product. When the product has
high quality, it becomes able to meet the goals and purposes of the customers. Under these
circumstances, the customers can obtain the goal based satisfaction. The current discussion
indicates that the functionality of the products improves when its quality improves. In other
words, when the quality improves, the received benefit from it also increases.

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However, while assessing quality of the products to determine the value, considering the
perspective of the customers is important. From the point of view of the customers, the product
quality can be categorized as the perceived product quality and the expected quality. The
perceived quality indicates the level of satisfaction a customer derives from the product. On the
contrary, the expected quality are the attributes the customers wish to obtain from the product.
Cost-- The perceived value of the product increases when the cost is low. The value of the
product is determined by the cost and the tangible benefits obtained from it. The value of the
product increases when larger tangible benefits are obtained at lower cost. On the contrary, the
customers perceive the value of the products as lower when they need to pay higher price for it.
Therefore, in order to increase the customer value, the businesses require reducing the cost. The
customers consider the cost as a sacrifice from their part. The risk of failure of the product is also
considered as the level of sacrifice. While purchasing the products, the customers consider to
receive high value on their investment. So, when the customers pay higher price, they expect to
receive higher value. As the expectation of the customers increases, the functionalities of the
products also need to be improved. If the product fails to perform accordingly, the perceived
benefit reduces. It causes reduction of the customer value.
Customer service—
Customer service can be considered as the support an organization offers to the customers. The
customer service is provided before making any purchase or using the products. The additional
assistance offered by an organization ensures that the customers are having an enjoyable and
easy experience.

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Offering quality customer service is essential if an organization wants to retain customers and
grow its business. In the contemporary market, the customer service is not limited to the
traditional support over telephone. Rather, the businesses are communicating with the
organizations in several ways with help of the web, email, message, and social media. Several
companies also enable the customers to obtain self-service support. With help of such
assistances, the customers become able to find their own solutions whenever needed. In the
recent days, the role of customer support is not providing answers only, but it has been emerged
as a key part of the experiences offered to the customers. The customer service plays a key role
to attain the customer satisfaction. When the businesses offer adequate customer service, the
benefits received by the organizations increase. It, in turn, enhances the customer value.
Logistics lead time