What Is Customer Value in Marketing and Why It Matters

There’s a unifying aspect between every successful business: they are all built on the design and delivery of value to their customers. But what is customer value in marketing? And why does it matter so much to marketing? Though it sounds like a marketing buzzword, knowing how to explain customer value is the core of an effective marketing plan.

This post will explain what is customer value in marketing, how it affects your marketing, and what you can do to measure and optimize it for maintaining stronger relationships with your customers. If you’re ready to supercharge your marketing approach, read on.

Understanding Customer Value

The essence of customer value is how a product or service resides in the mind of a customer in terms of benefits received against the price paid. In its most basic form, it’s the relationship between what a customer gives (money, effort, time, personal data) and what they get in return (utility, satisfaction, benefits). This dynamic is central to what is customer value in marketing.

Antecedents of Customer Value

Value is not the same as price to a customer. It includes:

• Quality

• Accessibility

• Customer Experience

• Price vs Benefit

• Brand Trust

All these contribute to shaping what is customer value in marketing in practical terms.

Customer Value and Why It Matters in Marketing

Providing customer value is fundamental to successful marketing. The reason it matters so much:

• Drives Customer Loyalty

• Boosts Brand Advocacy

• Affects how the customer makes a decision

• Improves Profitability

• Meets Contemporary Standards

Each of these benefits is a direct consequence of understanding what is customer value in marketing and applying it consistently.

What is the Customer Value and Various Types of Customer Value in Marketing

What customer value is in marketing also depends on the kind of value perceived by the customer:

Functional Value

Emotional Value

Economic Value

Social Value

Each of these types helps answer the broader question of what customer value is in marketing in different industry contexts.

How to Measure Customer Value

It can be difficult to quantify customer value because it’s subjective and varies from person to person. But there are ways to measure it effectively, which helps clarify what customer value is in marketing from a data perspective:

• Net Promoter Score (NPS)

• Customer Lifetime Value (CLV)

• Customer Surveys

• Churn Rate

How to Improve Customer Value

Do you want to be able to give more? Follow these actionable tips:

• Know Everything About Your Customers

• Deliver Quality Consistently

• Personalize the Experience

• Deliver Outstanding Customer Service

• Innovate Regularly

• Clearly Articulate Your Value

These improvements align with the principle of what customer value is in marketing by increasing perceived benefits.

Developing a Customer Value-Oriented Culture

Generating customer value is not just about promotion or flash advertising. It takes company-wide investment.

Examples of Value-Centered Firms:

• Amazon

• Airbnb

• Tesla

These companies are prime examples of what is customer value in marketing done right—across functional, emotional, economic, and social dimensions.

Takeaways for Marketers

This is the day and age of the new rule of marketing: It’s not about selling products anymore, it’s about creating and communicating value that speaks directly to your customers.

If you can find out what makes your audience tick, and deliver value from every direction, you will master what is customer value in marketing and convert customers into brand evangelists.

You can learn more about: What Is Business Marketing?