How Do I Charge Higher Prices? Deliver More Customer Value
The term customer value is easily booted about but what does it really mean? I often use the model above to take a fresh look at the value delivered from a customer’s perspective.
Total Customer Value: With every product, service or experience purchased, customers take away an overall customer value. He or she gets value from the product or service itself, but also from things like image (example: Gucci bags) and personnel (example: the likable bartender).
Total Customer Cost: Besides cash, customers “pay” in a variety of ways. They spend their time, energy and that very real “hassle factor” with every exchange. Amazon has made a fortune by taking these costs out of the experience (even the monetary cost feels painless with one-click shopping). Unfortunately, some companies (like a recent experience with our local soccer store) can block out all perceived product value with high costs of wasted time, incorrect orders and rude sales clerks.
Customer Delivered Value: Higher perceived value means you can charge higher prices. That perceived value varies with every customer and every sale but by paying attention to the details, you can constantly improve value, and profits. What can you do to increase customer value and/or decrease customer costs? Share in the comments section below.