customer value mapping

(noun)

A method of measuring how you are doing in general and how you are doing in comparison to your competitors by matching the cost of your product with the benefits your customers receive for it.

Related Terms

Examples of customer value mapping in the following topics:

  • 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).

  • Perceptual Mapping

    • Perceptual mapping is a graphic display explaining the perceptions of customers with relation to product characteristics.
    • Perceptual mapping is a diagrammatic technique used by marketers in an attempt to visually display the perceptions of customers or potential customers.
    • Perceptual maps need not come from a detailed study.
    • There are also intuitive maps (also called judgmental maps or consensus maps) that are created by marketers based on their understanding of their industry.
    • The value of this type of map is questionable, as they often just give the appearance of credibility to management's preconceptions.

  • Competition Based on Value

    • The migration from product-oriented to customer-oriented strategies is called Total Customer Value Management (TCVM).
    • This requires implementing a customer-focused vision – a major shift in strategic thinking, often including moving the basis for competition from product or price to process or service value.
    • TCVM goes beyond conventional customer value management, which provides a rational set of techniques, methodologies, and strategies to weave the needs and wants of customers into the key process designs and management activities of the enterprise.
    • TCVM also creates value for employees, business partners (customers, delivery chain, supply chain, unions) and shareholders.
    • By assigning customer tasks to traditionally non-customer facing departments like IT, Finance, and HR, a Continuous Customer Improvement Program is created to ensure customer delight.

  • Reminding and Retaining Customers

    • Authors such as Don Peppers and Martha Rogers discuss the transition from managing products to managing customers, and differentiating customers rather than just products.
    • To retain their customer base and satisfy customer requirements above those of competitors, brands must engage in the following process:
    • Implementing these relationship marketing practices helps companies counterbalance new customers and opportunities with current and existing customers to maximize profit.
    • It also counteracts the theory that new customers must be gained at the expense of losing older customers.
    • Nurturing customer relationships can lead to customer referrals and new business.

  • Value-Based Pricing

    • Value-based pricing seeks to set prices primarily on the value perceived by customers rather than on the cost of the product or historical prices.
    • This strategy focuses entirely on the customer as a determinant of the total price/value package.
    • Many customer-related factors are important in value-based pricing.
    • Value-based pricing is predicated upon an understanding of customer value.
    • Value-based pricing focuses entirely on the customer as a determinant of the total price/value package.

  • Adding Value

    • Marketing adds value to an organization by communicating relevant positioning and building long-term customer relationships.
    • It is the process of communicating the value of a product or service through positioning to customers.
    • 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.

  • Customer Service as a Supplement to Products

    • Customer service is provided before, during, and after the purchase of a product, and is meant to supplement and enhance customer experience.
    • Customer service is the provision of service to customers before, during and after a purchase.
    • The importance of customer service varies by product, industry and customer.
    • The focus must be on those KPIs that will deliver the most value to the overall objective, for example, cost saving and service improvement.
    • This is a form of customer service.

  • Delivering Excellent Service Quality

    • Customer service is at the core of any successful business, as it provides an incentive for customers to come back.
    • If the business offers the best customer service in the local market, then that could form the basis of the customer value proposition.
    • Good customers buy ten plus times more than marginal customers.
    • Some businesses will assign staff to high-value customers.
    • This table shows the benefits and costs of the customer value proposition.

  • Creating a Marketing Mix

    • Value is created by increasing benefits to the customers.
    • For this reason, "benefits" is specified in the numerator of this equation (the higher the benefits, the higher the perceived value by the customer).
    • On the other hand, "price" is placed in the denominator since the higher the price the lower the perceived value.
    • Now you must understand how value is created for your customers.
    • So now you know how value is created for your customer.

  • Positioning Bases

    • By using customer research and perceptual mapping, a marketer can create a positioning statement using one of the three main bases.
    • Strong positioning will enable a single product to appeal to different customers for different reasons.
    • By using customer research and perceptual mapping, a marketer can create a positioning statement using one of the three main bases.
    • When creating a positioning statement, it is important to determine a pain point of the customer.
    • Customers often buy on a want, rather than a need, impulse.