In is article we will discus on Customer Value, Satisfaction and Retention.
Customer value means to create superior satisfaction. It is the key concept for building a profitable relationship. In business, it is said that if you satisfied your target customers. If customers get enough satisfaction, they will be purchased again & again. However, It seems that they are more likely to be loyal customers. Moreover, Companies get a larger share of profit from them.
Customer value is the differences between the total cost and total benefit of the products.
But another thing we should keep in our mind that attracting & maintaining customers is not an easy task. In the market, the customer faces different types of product & services there. From there, they choose their product. But a customer only purchased from whom who offers the highest customer- perceived value, in short CPV.
CPV actually is “the customer’s evaluation of the difference between all the benefits & all costs of a marketing offer relative to those of competing for offers”.
The most important thing is those customers mostly act on perceived value.
Some consumers define value means a sensible product at an affordable price; another may define value might mean paying more to get more.
Customer perceived value has two ways.
- Total benefits (product, service, personnel, image)
- Total costs ( monetary, time, energy, psychic)
Customer satisfaction refers to a buyer’s expectation is related to product perceived performance.Because of lower performance of product , the customer may be dissatisfied.If product performance is equal to customer expectation, the customer is satisfied.
But if the product performance exceeds the buyer’s expectation, the customer may highly satisfy & delighted.
Most successful companies try to keep their customers satisfied. Because if they create a higher level of customers satisfaction that may lead to a greater level of customer satisfaction.
Customer retention is the keeping customer into a long run relationship. For this, companies need to satisfy the customer by providing better product performance. Otherwise, consumers may switch to competitors products. Besides, it is more expensive to attract a new customer. That’s why marketers try keeping their existing customer by satisfying them. There are several reasons for keeping existing customers. Let’s see-
- Loyal customers will buy more products. Besides, they also represent an opportunity to cross-selling.
- Long-term customers are familiar with the company’s products. However, they are also willing to buy a new product for testing.
- Loyal customers are fewer prices sensitive. Moreover, they pay less attention to competitors advertising. Thus, it makes harder for competitors to enter into the markets.
- Loyal Customers are familiar with the company’s offerings and processes.
- Besides, Loyal customers spread positive word of mouth.
- Loyal customers reduce less customer turnover. Besides, they ensure high profits.
- Besides, loyalty makes employees jobs easier. In turn, happy employees devote themselves to satisfy the customer more effectively.