What is Net Customer Value?

So what is customer value? More importantly, what is customer value today? The answer to that question is simple: It is something remarkable. In the old days, you could bring your product to market and “ad spend” your product to prosperity, at least to some extent. However, today, in a world of digital media, that opportunity has vanished.

So what is “remarkable?” Remarkable is a product that provides noticeable, conspicuous value at a parity, or lower price than competitive alternatives. There’s another great book called Free, Perfect and Now, connecting to the three insatiable customer demands by Robert Rodin Simon and Schuster. I like the title, because it’s what customer value is all about.

We live in an unbelievably competitive marketplace; no longer can we create the mediocre. We need to understand what our customers value in order to make certain we create innovations and solutions that don’t just perform but far exceed expectations.

The next step is to drill down and gain a further understanding of what customers value – or define what “net customer value” really means. Net customer value refers to the value of the experience derived from a product or service, not just compared to what the customer paid for it (that’s part of it) but compared to what they expected from it. So when we deliver more than the baseline level of pervasive or ordinary expectations, that’s when we become “exceptional,” and we become exceptional in different tiers, or what I call “strata.”

Innovation superstars have found ways of maintaining exceptional net customer value using innovation as a delivery mode. So if innovation is the delivery modality, what is the delivery target? The target is simply the customer’s experience. The experience is the difference between what they thought they were going to receive – their baseline expectation – versus what they actually received.

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