Customer Value and Value Creation
Everyone has a desire to fulfill their needs and wants. What I desire is of utmost important for me to get it fulfilled in the best possible way.
For example, in a personal context, we value money because we get things done thro money. We value relationship because relationship gives sense of identity, sense of belonging etc.,
In a Business Context, Customer values when his /her needs are fulfilled. Customer is keen to engage an organization first when his needs are fulfilled and second “how it is fulfilled “which means the complete journey from “customer first touch point to the final needs’ fulfillment”
1. Understanding the NEEDS of a Customer
What is a need? Lets take an example of hunger.
If the need is just to satisfy your hunger then any restaurant or any food joint will do. But if the need is to spend time, in a wonderful atmosphere ( the ambiance), no pressure to leave the restaurant as soon as you finish your food, then you choose a restaurant which provides the same. For example, Pizza hut, McDonald or any food joint of your choice etc.,
Hence, knowing the value (which comes from the NEED of the customer) and path to CREATE THE VALUE from the customer perspective is of utmost importance for any organization to acquire, retain and grow your customer base.
2. Understanding the difference
Further, NEEDs can be classified in to three categories viz., Stated, Expected and Implied.
The difference as follows:
Stated: Customer need to explicitly state the requirements.
Expected: Expected but not explicitly articulated by the customer nor required.
Implied : It is hidden needs of the customer and cannot be verbalized but when provided it will be noticed and valued by the customer. Satisfying this need will also bring the emotion of customer delight. This category can also be termed as LATENT NEEDS.
For example, Banking system:
Stated Need: Opening a savings account
Expected Need: Safety and security of the funds and personal information / data shared by the customer
Implied Need: Accessing the fund any time as per the convenience of the customer. Today ATM helps to deliver cash, but in future this may be very different.
3. Understanding the Customer Touch Points
Customer touch points are important source for understanding the Customer Journey with the organization (Journey map is an interesting concept I wish to write a separate blog) and the capabilities of a service provider to meet all the above three categories of NEEDS. Unfortunately, not every organization creates the value in the same way. That’s why, customer will PREFER certain restaurant (for example) over the others.
Though others also provide the same kind of food (which is the NEED) but the way the value perception is created (the customer touch points) may not be the same. Hence the value creation is important. Customer not only values the goods or services you provide but also carries a perception about how it is being delivered.
Perceptions are formed by the customer when he / she goes thro the cycle of NEED to USE referred as Customer Life Cycle Journey. In this journey the customers come in to contact with the service provider, for example, website, call center, service desk etc., to engage with the service provider.
In Summary:
1. Understand the NEED
2. Identify the touch points
3. Create the customer journey
4. Deliver VALUE