Customer value is defined as what?

Customer value is defined as the benefits perceived by the customer minus the costs incurred. This definition emphasizes that customer value is not just about the price of a product but rather the overall experience and the net benefits that a consumer derives from a product or service.

When customers evaluate a product or service, they consider not only what they pay (the costs) but also what they receive in return (the benefits). These benefits can include quality, features, convenience, brand reputation, after-sales service, and emotional satisfaction. The net effect of these perceived benefits over the costs creates what is known as customer value.

In this context, it’s important to understand that customer value can differ significantly from one consumer to another based on individual priorities and perceptions. The calculation of customer value encourages businesses to enhance their offerings and find ways to increase benefits while managing or reducing costs, ultimately leading to higher customer satisfaction and loyalty.