customer value analysis

Examples of customer value analysis in the following topics:

• Adding Value

  • It is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value.
  • To reveal the company's strengths and weaknesses compared to other competitors, it is important to conduct a customer value analysis.
  • Conducting an effective customer value analysis can lead a company to creating an accurate value proposition.
  • A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced.
  • Developing a value proposition is based on a review and analysis of the benefits, costs and value that an organization can deliver to its customers, prospective customers, and other constituent groups within and outside the organization.

• The Development of Value-Driven Firms

  • The values of an organization are just as important as the products they sell; having a strong value driven culture is important.
  • This was the precursor to customer value management, which has been practiced for the last 35 years, being incorporated into corporate thinking.
  • Some people focus on customer service, others on customer experience, others on lifetime value for a customer; many companies believe that having a customer service department is all it takes to create customer value.
  • A new practice called Total Customer Value Management (CVM) involves a total focus upon the customer.
  • Voice of Employee will be captured through the Customer Circles and Employee Value Add, and the Voice of Customer and Voice of Competitor will be captured by Customer Value Added (CVA).

• Marketing Orientation

  • Competitive analysis is also a significant component of market orientation.
  • Since its introduction, marketing orientation has been reformulated and repackaged under numerous names including customer orientation, marketing philosophy, and customer intimacy.
  • As stated, the most important focus in a market-orientated business is the customer.
  • Nevertheless, organizations that follow a marketing orientation model realize that delivering superior customer value through product innovation, as well as products and services tailored to customer needs, directly correlates with generating revenue.
  • A company adopting a marketing orientation must focus on the desires of its customers.

• Other Inputs to Pricing Decisions

  • Factors to consider in pricing include Economic Value added to Customers (EVC), competitor's pricing, and government regulations.
  • When customers spend money on a product or service, their main objective is to add value to their lives in some way.
  • Marketers can also study this effect on their products using Economic Value for the Customer (EVC).
  • EVC is based on the insight that a customer will buy a product only if its value to them outweighs the value of the closest alternative.
  • The utility of a product depends on its value to the customer minus its price.

• Identifying Potential Business Customers

  • Identifying your customer begins with formulating a value proposition.
  • You have to be able to answer this question: "To whom is this proposition of value?
  • This would occur during the periods of market analysis and customer research in the product development cycle .
  • Thus, if a company identifies a potential customer but is uncertain what industry that customer belongs to, using the industrial classification from the NAICS can provide more detailed information on the specific business activities of that potential customer.
  • In the product development cycle, the market analysis and consumer research phases are used to identify customers.

• Business Analysis

  • A complete cost appraisal is also necessary as part of the business analysis.
  • Based on these costs, the business analysis stage will estimate the likely selling price.
  • This figure will also depend on the level of competition, as well as customer feedback.
  • Customers base buying decisions on a personal value equation where the value is calculated by weighing the cost versus the benefits.
  • Financial ratio analysis allows an observer to put the data provided by a company in context.

• Developing Products

  • Developing products involves multiple steps and an in-depth analysis of your customer base.
  • The two best approaches are to base initial new product prices either on "comparables" or "value."
  • Value: If there is insufficient information available about comparables (e.g., because the new products are truly breakthrough in nature), then you can try to discover what your ideal customers are currently paying to satisfy the need your new product fulfills, or what it is currently costing them by failing to satisfy the need.
  • This is referred to as "value-based pricing."
  • You may be able to extract value from customer surveys by asking them about the nature and annual costs of the problems that your new product addresses and how much it currently costs them to either solve or make do without a solution.

• Scorecard Measurement

  • For instance, a company can find a measure to inform about a particular objective within the Customer perspective rather than find a measure for customers in general.
  • This gives the scorecard more practical value.
  • Gap analysis can be conducted from the following perspectives:
  • Gap analysis lends itself to the measurement aspect of the balanced scorecard, ensuring that maximum value may be derived from the exercise.
  • For example, financial measures can be defined as discrete values in the context of accounting ratios and continuous values in the context of dollar figures.

• Scanning and Analysis

  • A trend break could be a value shift in society, a technological innovation that might be permanent, or a paradigm change.
  • Marketing managers are confronted with many environmental concerns, such as those posed by technology, customers and competitors, ethics and law, the economy, politics, demographics, and social trends.
  • A trend break could be a value shift in society, a technological innovation that might be permanent, or a paradigm change.
  • One approach is the PEST analysis.
  • Two more factors, the environmental and legal factor, are defined within the PESTEL analysis (or PESTLE analysis).

• Regression Analysis for Forecast Improvement

  • Regression Analysis is a causal / econometric forecasting method.
  • In addition to weather, seasonality can also result from holidays and customs such as predicting that sales in college football apparel will be higher during football season as opposed to the off season.
  • Regression analysis includes a large group of methods that can be used to predict future values of a variable using information about other variables.
  • More specifically, regression analysis helps one understand how the typical value of the dependent variable changes when any one of the independent variables is varied, while the other independent variables are held fixed.
  • Most commonly, regression analysis estimates the conditional expectation of the dependent variable given the independent variables — that is, the average value of the dependent variable when the independent variables are fixed.