How do Customers Perceive Value?

How do your customers convince themselves that buying your goods or services provide them a good value? Value is typically described as the benefit per unit cost or incremental benefit per incremental cost. Those increments can be how your product is perceived compared to your competition. So, the natural question is “How is benefit perceived by customers?”

David A. Garvin is noted for his “Eight Dimensions of Quality.” Interestingly, those “dimensions” look very much like attributes of a product that provide benefit to a customer.

Function The product operates well Performance
Extras More than the basic function Feature
Quality The quality attributed to a good or service based on indirect measures Perceived Quality
Utility Does something useful Conformance
Availability Can get one quickly Reliability
Life It will last Durability
Repairable Can be fixed and put back into service Serviceability
Look and feel Attractive and desirable Aesthetics

After all, customers want a quality product or experience, and they don’t want to pay any more than they must. Customers make decisions on sourcing based on their perception of value. Providing them noticeable benefit at a reasonable cost helps them make that decision.

Wait a minute! Which of these attributes of benefit is most important to my customers? What if I said, “All of them?” The real problem is that each customer will prioritize the list differently.

Sometimes, it’s not the product or its function. It’s the packaging. Sometimes, it’s neither.

The challenge for the entrepreneur is to find balance in addressing the most critical attributes or dimensions for the primary customer market.

ABOUT THE AUTHOR: Mr. Czerniak retired after a successful career that culminated in fifteen years of experience as an internal consultant and “change agent.” He is currently a volunteer at the Macomb-Oakland University Incubator and the Troy Historic Village and Historical Society.

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