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Creating Real Customer Value as the Main Driver of Business Success on the Internet...


Defining Value for the Purpose of Internet Business.


Value has been defined in many ways in business schools and textbooks over the years. It's often analyzed in mathematical terms, such as...

Value = (worth/price) or...

Value = (User's initial impression + satisfaction in use)/(initial cost + follow-up cost).

Although defining it like that may provide a clear picture of "what is customer value"... and surely, of its intangible and subjective nature.

But it doesn't quite do it, does it?

At least not as far as incorporating the concept of customer value into a clear and specific strategy for marketing a business on the internet.

Evidently, these "formulas" used to define value aren't meant to be used to "crunch" hard numbers, but to convey an idea...

And it's quite possible that there's simply no definition in the world that will define value in a way that inspires action...

But here's a shot at it, anyway...

Value is the trade-off that exists between...

 

The positive results of interacting with your internet business.

 

All the negative aspects associated with acquiring, owning, and making use of its offerings.

 

Here, positive results are the benefits customers can perceive from your internet business, its products, and your offer in general... but only after making the necessary "cash commitment" to assume ownership.

That "cash commitment" is evidently only one of the several negative aspects inherent in any offer...

Therefore, value is created when the sum of perceived benefits outweighs all the negative aspects in the offer... including the initial purchase price, and all other possible costs incurred over time.

Only benefits add value... negative aspects, such as price, subtract from it.

 

The Intangible and Dynamic Nature of Value...

Success in any business has much to do with value...

But value, of course, is a relative term in that it can't be measured directly, or in absolute terms...

It's what your customers perceive it to be.

Value in internet business is created by all processes that contribute to providing customers with positive experiences and positive results...

Customers perceive value through experiences... they determine their perception of value.

Realizing this simple truth... that creating and delivering value drives internet business success, will help you focus your efforts on designing special and unique experiences.

And, customers will always "experience" your internet business!

But beware... experiences will always change.

So, your customers' perception will also have this "dynamic" characteristic.

Creating and delivering value means satisfying different, but very specific needs for different people at different times...

As so, not only can an internet business's offering be valued by some customers much more so than others, but a single customer may value such offering differently at different points in time.

Return to "The Value Ingredient" from "What is Customer Value as a Vital Question for Internet Business"

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