Customer Value and Experience

Apple’s Steve Jobs clearly understood that the customer’s value of the product is embedded in the customer’s experience of the product. That is, the customer’s value and experience are inextricably intertwined. The hard part for brands/sellers to recognize and admit, is that the sole person that determines ‘value’ is the customer.

In any customer relationship, the overriding factor is the definition of value. And value for the customer might be expressed in terms like these:

  • I want what I want,
  • when I want it,
  • how I what it,
  • where I want it,
  • and at the price I choose to pay.

Only when the customer’s terms are satisfied, might ‘value’ be confirmed by the customer.

This obviously presents a problem for those organizations whose primary customer engagement strategy consists of ‘push’ messaging (read spam) to the customer. This does not create a positive customer experience.

Is there a different approach?

The late C.K. Prahalad, co-author of Competing for the Future, suggested a new model for customer relationships. At the heart of it, he states that “value creation is creating unique customer experiences”. As a guideline, Prahalad provided a list of objectives to help an organization to evaluate their strategy and process methodology for the “creation of value”:

  • Value is created at the point of exchange (‘touchpoint’)
  • Value is co-created by customer and brand/seller
  • Value is embedded in the experience
  • Experience fulfilment is critical
  • Products and services carry the experience
  • Need to innovate ‘experience’

The real challenge is to understand how to create customer value in terms of customer experience. And to understand it on the customer’s terms.

Joe Pine, author of The Experience Economy, suggested how an organization might evaluate how well they are executing this in terms of customer experience:

  • If you charge for stuff, then you are in the commodity business.
  • If you charge for tangible things, then you are in the goods business.
  • If you charge for the activities you execute, then you are in the service business.
  • If you charge for the time customers spend with you, then you are in the experience business.

If we synthesize Prahalad’s and Pine’s viewpoints, we have starting point, possibly a roadmap. This would enable an organization to understand where they might be in embedding customer value as part of the customer experience.

But we know customers continually change. Forrester Research coined a phrase “the mobile, always-connected customer” that aptly describes a key change. This presents both a threat and an opportunity for brands/sellers to focus on their own customers and their view of value.

A mobile-based engagement strategy presents the brands/seller with an opportunity to satisfy the customer’s need for value. The caveat – it’s not more of the same, i.e. simply ‘push’ messaging (read spam) to the customer. This is not positive customer experience. Nor does it translate into any customer value.

The challenge is clear! Customer value is embedded in the customer experience.