Managing Customer Perceived Value

This chapter centres on managing customer perceived value. There are several ways to conceptualise customer perceived value, but the two most common focus on the differences between customer perceived benefits and customer perceived costs, and whether customers achieve their purchase goals. The distinction between value-in-exchange and value-in-use is useful when trying to understand customer experience as it unfolds. By understanding customer perceptions, and the underlying motivations for buying decisions, managers have a better chance of offering value propositions that customers prefer.

The chapter delves into the various tools that companies can use to create positive customer perceived value. This begins with the value proposition. Calibrating the value proposition in terms of the benefits it offers and its format can help companies adapt to differences in customer perceived value. As a multi-faceted idea, the value proposition also involves elements from the 7Ps of marketing (product, price, place, promotion, process, people, and physical evidence). Ensuring the company’s operations can deliver on the value proposition in such a way that is beneficial to the company as well (i.e., by generating profits and achieving efficiencies) is an art form but is also the crux of customer perceived value management.