In this article, we will discuss Customer Value, Satisfaction, and Retention.
Customer value means creating 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 difference between the total cost and total benefit of the products.
But another thing we should keep in our mind is that attracting & maintaining customers is not an easy task. In the market, the customer faces different types of products & 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 meaning 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 related to product perceived performance. Because of the lower performance of the 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 be highly satisfied & delighted.
Most successful companies try to keep their customers satisfied. Because if they create a higher level of customer satisfaction that may lead to a greater level of customer satisfaction.
Customer retention is keeping customers in 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 to keep their existing customers 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 for 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 less price sensitive. Moreover, they pay less attention to competitors’ advertising. Thus, it makes it harder for competitors to enter the markets.
- Loyal Customers are familiar with the company’s offerings and processes.
- Besides, Loyal customers spread positive word of mouth.
- Loyal customers reduce customer turnover. Besides, they ensure high profits.
- Besides, loyalty makes employees’ jobs easier. In turn, happy employees devote themselves to satisfying the customer more effectively.