What do your customers value in your product? This is a question asked by many people. If you know the answer, you are a very smart marketer. But surprisingly, simple though the question is, most people dont spend time answering it. Instead they keep looking at their own product and at their own organization rather than looking at their customers and asking this simple question – What do my customers value? There is a simple way to analyse customer value. This method is also known as Customer value analysis. The same can be explained in 4 simple steps.
1) Which features/attributes do the customers value the most
This method is increasingly being used by marketers to find out which features offered by their product matters most to the customers. Based on this analysis, companies can alter the features offered by their products such that they acquire more customers and retain their existing ones. A company can have multiple variants of the same product so as to create customer value. Thus each customer can have his own choice. This is the example used nowadays in FMCG, wherein, a simple product like soap is being offered in as many variations as possible to satisfy the end customer. Thus these products are targeting the customer value.
2) Ranking of each feature
Another step in analyzing customer value is, if given an option of 10, which ones will the consumer choose 1st, 2nd or 3rd. For example – Youngsters will value the looks of a product. Thus the same VIP bags which gives briefcases and travel bags will make carry bags which are smart in design because the youngsters values are different than older people. On the other hand, a couple who are traveling will want a larger suitcase. So on and so forth. This is how, by ranking each feature by its priority gives you ideas on different variants of products you can start thereby creating customer value.
3) Compare attributes and features with a competitor
As in any study or analysis, you need a frame of reference. In case of customer value analysis, your competitors be the perfect frame of reference. Along with your internal analysis, you should also analyze what features of benefits given by your competitor is attracting the customer. For example – if one restaurant gives home delivery free, it is saving on cost and at the same time, it will have larger orders. Thus if you are a restaurant owner, you need to keep watch on all the restaurants in your locality to know what is it that attracts your customers to them? Although you do not need to copy the same benefit, you can, however, design an offer of your own which attracts the customers and makes them come back to your product.
4) Monitor features vs customer value over time
Customer preferences can change with a change in time. Lets take the above VIP bags example. The youngster of today will become a working man of tomorrow. At that time, he might shoft to a more formal bag than the one he used to take to college. Thus his preferences have changed. However, these preferences are observed by the company. What if there is some unobserved shift/trend in the market which is not being noticed by anyone else. This happened in the PC market in 2010 wherein the shift from desktop PC’s to laptops was sudden. Today most people prefer a laptop instead of desktops. Thus companies which did not make their move to laptops are suffering.
Therefore, at any given point of time you should know what your customer values the most and also you need to keep a track of changing customer preferences such that you can offer them features and benefits according to the changing times. Ignore your customers, and you will never survive or take care of your customers and your business will thrive.