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Customer Value

1 November 2022
Michal Gil- Peretz
Dr. Moria Levy

The term Customer Value is seemingly redundant. When creating a new product or service, organizations are obviously seeking to benefit their potential consumers somehow. However, customer value involves more than assisting customers.

It is comprised of several components.

The first and clearest component is indeed the functional value, the ability to perform a certain function: to become more content, know more, save time, etc.

 

When reviewing customer value, we also consider the product/service's cost. We consider what the customer pays, which leads to a complex and more interesting definition, providing customers with a fair price for a quality product. The price can be monetary (e.g., the consumption products rated highest by Trip advisor). However, in intra-organizational terms, the cost can be calculated in relation to the time investment required from customers, the operation's complexity, etc.

In short, value assessment includes benefits and costs.

 

We could have ended this article at this point. However, the definition of benefit in our age of abundance includes, besides the functional aspect, an experiential component: the value the customer benefits depend considerably on the User Experience and their contention, both in terms of each consumption and the overall improvement over time.

 

Why are we discussing Customer Value?

Because Customer Value is the key to successfully offering solutions and, more specifically, Knowledge Management solutions.

Because, in many cases, we are too busy considering the best next step for the organization, we tend to forget the customer, the knowledge consumer, and lose them either during the process or down the line when they wish to make use of this solution.

Successful Knowledge Management solutions depend on us repeatedly focusing on Customer Value:

  • What do they benefit from this?

  • How much effort will they have to invest in implementing it?

  • What will the User Experience be like? Will they feel good (in some cases even enjoy) when implementing the knowledge solution, we offered them?

 

So, consider Customer Value. Consider what customers may lack and what will make them happy. Ask them. Talk to them instead of assuming you know what they need since you, too, are a customer. Don't slack off because this matter is simple: when customers are provided with functional, experiential value coupled with adapted cost over time, there is a higher chance we are on the road to success.

 

References:

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