Thursday, December 10, 2015

Raising Subjective Customer Value Perceptions Through Reducing Core Confusion

Customer perceptions maybe subjective but do have tangible value in their minds. Customer perceived value  (CPV) is the difference between a customers benefits and costs associated with purchasing a product/service. Raising CPV isn't impossible if the company understands its core demographic and caters its products and services to them.

When the company's products and services are aligned with their core customer base they are better capable of raising per visit purchase amounts as well as retain these customer over a lifetime improving long-term profitability. Unfortunately, many businesses suffer from what I call "core confusion". This occurs when they are not sure who they are as a business and who their customer is.

A company might have multiple products that appeal to different segments. They are trying to be everything for everyone. Their confusion leads to confusion in marketing which in turn draws in lots of customers that have different perspectives the company is not able to meet, products/services that don't fit well, and lots of wasted resources trying to earn a small dime from each customer when they could be earning bigger dollars.

Raising customer perception requires knowing what you are as a company and the type of customer you want to attract. Marketing should be focused on that core customer and services should cater to that core customer as much as possible. If a company does this well they will find their profits rising and their costs going down; shareholders are happy.

When core confusion is low the right customer is being attracted which costs less in overall marketing as the company is high skilled and focused in their campaigns. Less money is spent attracting customers as well as less money actually retaining them over a longer period of time. Internal operations improve as activities become aligned to their core group and stakeholder satisfaction rises with a consistent product, performance and message.

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