Today’s marketing is all about customer value, from creation to management and analysis. However, it isn’t uncommon for business to confuse value with satisfaction. After all, they do sound like terms with similar meanings.
These two concepts are vital to all of your marketing efforts and are both parts of the customer value journey, but knowing their differences is vital to your success. Here’s everything you need to know about customer value and customer satisfaction.
Value is multi-faceted from the customer perspective. While a simplified version would be product benefit in relation to cost, there’s more to it than just that. Value is also derived from product/service quality, after-sale services, warranties, delivery cost, and relations with staff.
It also includes the time and effort it takes a customer to buy a product, whether alternatives are offered, and more. The easiest way to define value is the entire experience a customer has from the moment they arrive at a store to the moment they leave, cleanliness of bathrooms included.
The same is true in digital spaces. How a website looks and functions matter immensely, as does the ease of finding the products a consumer is searching for. Every minor detail of their interaction with your online or storefront business comprises the value they perceive.
Satisfaction relates directly to value. Any given customer will evaluate their experience with your store based on all of the above metrics, then determine how satisfied they feel after the experience is over. They’ll consider if their expectations of a product were met, how they were treated by employees, the ease of navigating the store, and more.
This metric is far more difficult to measure since it relates to the way a consumer feels, making it highly subjective. Components like previous experiences, seller promises, and recommendations from friends also influence satisfaction levels. This makes your goal to focus on value, meeting or exceeding a customer’s value expectations with each experience they have with your business.
The primary difference between these two aspects of the customer value journey is their meanings, as mentioned above. However, there are other key points to take note of. The first is the type of process, with value being proactive (before the sale) and satisfaction being reactive (after the sale).
Next is the conceptual nature of each. Value is entirely derived from the customer point of view. It looks at the value your business offers them in relation to your competitors. Satisfaction is emotional, pertaining to the consumer’s feelings as opposed to their thoughts.
How each is used is also a vital difference. Strategic measures for value include pricing decisions, distribution methods, and communication systems. Strategically viewing satisfaction simply measures customer response to the experience, giving business a way to build more value through customer service.
Finally, there’s the computation element. Value can be boiled down to subtracting the customer’s cost from the benefits they receive, making it a simple monetary equation. A consumer is more likely to spend a higher amount in clean, friendly, high-end store as opposed to a run-down corner location, for instance.
Satisfaction, on the other hand, is qualitative instead of quantitative. Computing satisfaction means subtracting actual product and business performance from the customer’s expectations. These final two elements are key components for any marketing team looking to increase profits.