Customer Value Framework
This is a widely accepted framework of Customer Value represented as the trade-off between the perceived sacrifice and benefit for a customer.
Value of the product
Value is the extent to which a good or a service is perceived by its customers to meet their needs or wants, measured by customers' willingness to pay for it.
It is associated with the total benefit of using a given product. It includes all aspects of the product, service, rational and image benefits that a customer perceives he gets as opposed to the sacrifices he is bound of.
This is the core benefit of a product which will fulfil a particular customers’ need. It also includes the benefits of utilizing the augmented features of the product. It is influenced by the perceived quality, and the overall satisfaction or dissatisfaction of experiencing these benefits.
This is the core benefit of a service which will fulfil a particular customers’ need. It is influenced by the overall satisfaction or dissatisfaction of experiencing these benefits.
It is the associated customer value which derives from the relation the customer has with the provider of the product. It is usually a service but it could well be a delivery of a good. Most B2B businesses heavily rely on strong interconnection between their sales force and their customers.
The customer perceives that his personal image will benefit from using a particular good or service. This aspect has a strong relation with all branded products.
The combined sacrifice perceived by the customer that is traded in return of receiving the benefits of the product.
All costs related to obtaining, maintaining and using the product.
How much time does it take to obtain the product or the service and start experiencing its benefits.
How much energy does it take to obtain the product or the service and start experiencing its benefits.
This aspect of the customer value reflects the perceived risk, in terms of not making the right decision. When making a decision, a customer has at least two possibilities and choosing one over another always implies a sense of risking not making the best decision.