What are customer value satisfaction and loyalty and how can companies deliver them ?

Though customer value and customer satisfaction sound similar, there are some differences between them. Customer value and customer satisfaction emerge from the same core concept of customer delight. However, both are used to identify different parameters of customer experience, customer perception, and purchasing behavior. So, there are some obvious differences between them. But, on simple sight, they are hard to spot. Both concepts are important for all organizations, and they need to concentrate on them for business excellence. The benefits of excelling in customer value and customer satisfaction are customer loyalty, customer retention, high customer lifetime value, market leadership, and goodwill. Both concepts are subjective as they have the tendency to be different from person to person.

Customer Value:

Customer value is the amount of benefits which customers get from purchasing products and services. It can also be defined as the difference between the values customer gains from using a product and cost of the product.From a theoretical perspective, the value is the total perceived benefit exceeding the total perceived cost. Customers evaluate the trade-off between the benefits they are acquiring and the price they are paying for those benefits. Customer value can be shown as an equation as below:

Customer Value = Total Customer Benefits – Total Customer Costs

 Customer value is high if the customer gains more benefits as compared to the cost of product and services and customer value is low if the customer gains fewer benefits as compared to the product and services cost. For Example, customer value of Dell laptops and computers are high in view of its customers. Dell products’ quality, efficiency, brand, delivery and after sale service are the benefits for buyers and definitely itpays more than cost of the product and services.

Customer Satisfaction:

Human beings always build some expectation in their mind about person, place, product, services, etc. In marketing, buyer has expectation with the product which he or she is going to purchase. The buyer’s expectation about product comes from marketing, word of mouth or brand reputation.

Buyer will be satisfied if the product meets or exceed expectations. Buyer will be dissatisfied if the product does not meet the expectation which buyer had set in his mind before buying it.